Germany’s economy contracted by 0.3% in the second quarter compared to the previous three-month period, according to official data released on Friday. The revision follows an initial report that showed a 0.1% contraction in April-June, and is significantly worse than initially thought.
The decline was driven by weaker-than-expected manufacturing and construction output in June, as well as revised downward household spending for the quarter. This marks the second consecutive year of economic shrinkage under Chancellor Friedrich Merz’s administration.
To address this issue, the government has launched a program to encourage investment and set up a 500 billion-euro fund to boost infrastructure over the next 12 years. It aims to reduce bureaucracy and accelerate digitalization efforts.
In recent weeks, dozens of companies have pledged to invest at least 631 billion euros in Germany over the next three years, signaling confidence in the economy. However, economists warn that it may take until next year before a more substantial recovery takes hold.
Source: https://apnews.com/article/germany-economy-gdp-shrank-second-quarter-ed5a0ca6732d3cf92828e045144defc2