Recession has knocked in Europe’s largest economy Germany. In fact, Germany’s economy has been facing the brunt of recession for the past few years. Now the GDP figures have come out. Seeing that, it can be clearly said that Germany is in the grip of recession. According to statistics from the Department of Statistics, Germany’s GDP has declined for two consecutive quarters.
In the first quarter of the year 2023, Germany’s economy has recorded negative growth. According to the quarterly data released on Thursday, Germany’s GDP has shrunk by 0.3 percent in the first quarter of the year. Earlier, in the fourth quarter of the year 2022, Germany’s GDP had shrunk by 0.5 percent. Whenever negative growth is registered for two consecutive quarters in an economy, it is considered to be a recession.
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People are unable to bear the burden of inflation
The general public has been troubled by the situation of inflation in Germany. Actually, after the warning of energy supply from Russia, the inflation is increasing. There has been a decline of 1.2 percent in the consumption of household goods. Germany’s economy rests on exports, but since the time of Corona, a huge decline has been registered in it. Germany has not yet been able to emerge from the hit of Corona. Although some relief was definitely seen after the end of the lockdown, but it proved to be a saying of cumin in the camel’s mouth.
Crisis on manufacturing sector
Germany’s second biggest strength was its manufacturing sector. This sector of Germany is facing serious challenges. The effect of which is clearly visible on the economy. According to the banks, shortage of raw material and availability of workers is adding to the problems. According to the German Central Bank, the situation had definitely improved in the last phase of 2021, but the figures of 2022 dashed the hopes of this improvement.
The impact of Ukraine crisis also showed
Manufacturing, inflation, Germany was suffering even before Corona. Russia-Ukraine has done the right thing. In fact, there were more than 100 such sectors in Germany’s economy which used to provide goods and services in large quantities to Russia. But the Russo-Ukraine war spoiled all the work. On the other hand, Germany’s gas supply is also largely dependent on Russia. The Russo-Ukraine war did the work of sabotage here too.
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