The decrease in German GDP in the second quarter was stronger than was initially estimated and industry setbacks, which fight with US customs’ tasks, came to erase the uprising of the first quarter. Between April and June, the Gross Domestic Product, corrected by price, seasonal and calendar variations, decreased 0.3%, according to a press release from the Institute of Statistics Destained on Friday. In July, its first estimate for GDP was a 0.1%decrease.
The pause will have been brief for the first European economy, whose activity had experienced a rebound of 0.3% in the first quarter, also slightly reviewed on Friday. A purchase frenzy before the establishment of American customs duties had benefited the pillars of the German economic model, exports and industrial production.
Industrial production suffered in spring, with a 0.3% decrease compared to the first quarter, more marked than expected. It has decreased “in almost all sectors of the manufacturing industry, except in the production of cars and car parts, as well as in the construction of other vehicles,” said the press release. As for exports, 0.1%fell, the services (+1.4%) increase when falling into goods (-0.6%).
There is no response in view in the third quarter
Even if the commercial agreement between Brussels and Washington reduces uncertainty, with a rate of 15% of customs duties, “the trend will not change much in the third quarter,” Carsten Brzeski plans, while the industry in crisis is still fighting with high energy costs.
As for the hundreds of billions of euros in investments unlocked by the government for defense and infrastructure, they have not yet had time to infuse the economy. In the second quarter, investments decreased 1.9 % in equipment and 2.1 % in construction. Consumer spending has certainly increased by 0.3%, but those of households were less dynamic than expected.
In addition, according to desatis, the recessions of the last two years have underestimated strongly. In 2023, GDP fell 0.7% and not 0.1% as estimated before. By 2024, it fell by 0.5%, or 0.3 percentage points less than the previous estimate.
Source: BFM TV
