- Ex-Stasi officer faces verdict over 1974 Berlin border killing
- Role of government, poverty research tipped for economics Nobel
- In milestone, SpaceX 'catches' megarocket booster after test flight
- In a first, SpaceX 'catches' megarocket booster after test flight
- Bangladeshi Hindus shrug off attack worries to celebrate festival
- Ubisoft fears assassin's hit over falling sales
- Vietnam, China hold talks on calming South China Sea tensions
- SpaceX will try to 'catch' giant Starship rocket shortly before landing
- Japan's former empress Michiko discharged after surgery: reports
- Japan's former empress Michiko discharged after surgey: reports
- 'Little Gregory' murder haunts France 40 years on
- Tariffs, tax cuts, energy: What is in Trump's economic plan?
- Amazon wants to be everything to everyone
- Jewish school in Canada hit by gunfire for second time
- With medical report Harris seeks to play health card against Trump
- China-EU EV tariff talks in Brussels end with 'major differences': Beijing
- Buried Nazi past haunts Athens on liberation anniversary
- Harris to release medical report confirming fitness for presidency: campaign
- Nobel prize a timely reminder, Hiroshima locals say
- China offers $325 bn in fiscal stimulus for ailing economy
- Small Quebec company dominates one part of NHL hockey: jerseys
- Boeing to cut 10% of workforce as it sees big Q3 loss
- Want to film in Paris? No sexism allowed
- US, European markets rise as investors weigh rates, earnings
- In Colombia, children trade plastic waste for school supplies
- JPMorgan Chase profits top estimates, bank sees 'resilient' US economy
- Little progress at key meet ahead of COP29 climate summit
- 'Party atmosphere': Skygazers treated to another aurora show
- Kyrgyzstan opens rare probe into glacier destruction
- European Mediterranean states discuss Middle East, migration
- Thunberg leads pro-Palestinian, climate protest in Milan
- Stock markets diverge before China weekend briefing
- EU questions shopping app Temu over illegal products risk
- Han Kang's books sell out in South Korea after Nobel win
- Shanghai markets sink ahead of briefing on mixed day for Asia
- Investors, analysts eye bigger China stimulus at Saturday briefing
- Musk unveils robotaxi, pledges it 'before 2027'
- At least 11 dead in Florida but Hurricane Milton not as bad as feared
- Asian markets mixed after Wall St drop, Shanghai dips before briefing
- Automaker Stellantis says CEO will retire in 2026
- Musk's promised robotaxi unveil delayed
- On US coast, wind power foes embrace 'Save the Whales' argument
- At least 10 dead in Florida after Hurricane Milton spawns tornadoes
- Internet Archive reels from 'catastrophic' cyberattack, data breach
- Wall Street stocks retreat from records on US inflation data
- Israel strikes central Beirut, killing 22
- Solar storm could impact US hurricane recovery efforts: agency
- Delta eyes Election Day travel pullback as profits climb
- Florida battered by hurricane, floods but spared 'worst-case scenario'
- UK's William and Kate in first joint public engagement since cancer treatment
Germany in recession as inflation, higher interest bite
Germany fell into a recession around the turn of the year, official figures published Thursday showed, as inflation and higher interest rates curbed demand in Europe's largest economy.
Over the first three months of 2023, the economy shrank by 0.3 percent, the federal statistics agency Destatis said, downgrading an initial estimate of zero percent.
Following a 0.5-percent contraction in the last three months of 2022, it was Germany's second consecutive quarter of negative growth -- the threshold for a "technical recession".
The slump came as Germany battled a surge in energy prices in the wake of the Russian invasion of Ukraine, which has weighed on households and businesses.
The increased cost of energy has driven inflation, which sat at 7.2 percent in Germany in April, down only slightly from its peak towards the end of 2022.
"The persistence of high price increases continued to be a burden on the German economy at the start of the year," Destatis said in a statement.
The impact was felt particularly by consumers who reined in their spending on items such as food and clothing.
The negative revision to the growth figure was no surprise following a string of weak economic indicators, LBBW bank analyst Jens-Oliver Niklasch said.
"The early indicators suggest that things will continue to be similarly weak in the second quarter" of 2023, Niklasch said.
Industrial orders, which give a foretaste of factory output, plummeted in March when compared with the same month last year.
- 'Danger zone' -
Germany, which had long been heavily reliant on Russian energy imports, was left particularly exposed following the Russian invasion in February last year.
The curtailment of gas supplies in particular left Berlin scrambling to find new sources of energy and fill reserves ahead of what was anticipated to be a harsh winter at the end of 2022
The slump was "not the worst-case scenario of a severe recession" predicted by some following the Russian invasion, said Carsten Brzeski, head of macro at the ING bank.
But mild temperatures, a rebound in key market China and the easing of supply chain problems following the coronavirus pandemic were "not enough to get the economy out of the recessionary danger zone", Brzeski said.
"A drop in purchasing power, thinned-out industrial order books as well as the impact of the most aggressive monetary policy tightening in decades" were likely to drag on the economy further, he said, referring to the European Central Bank's interest rate hikes against inflation.
An anticipated slowdown in the US economy and the continuation of the war in Ukraine would also weigh on output, he said.
The figures will trouble policymakers in Berlin who in April raised their forecast for economic growth in 2023 to 0.4 percent, amid early year optimism.
German Chancellor Olaf Scholz had previously signalled confidence that Germany had done enough to fend off a painful economic contraction.
Germany's last recession came as the coronavirus pandemic swept through Europe at the start of 2020, prompting governments to effectively shut down large swathes of the economy.
P.Schmidt--CPN