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German economy stagnates in Q2

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BERLIN — The German economy stagnated in the second quarter, data showed on Friday, with the war, pandemic and supply disruptions bringing Europe’s largest economy to the edge of contraction.

Gross domestic product was unchanged quarter on quarter in adjusted terms, the federal statistics office said. A Reuters poll of economists had forecast growth of 0.1%.

However, the economy did better in the first quarter than originally reported, with the office upwardly revising that quarter’s growth to 0.8% from 0.2%.

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Household and government consumption in particular helped support the economy in the April to June period, whereas the trade balance held it back, according to the office.

“The difficult framework conditions in the global economy, including the COVID-19 pandemic, interruptions in supply chains and the war in Ukraine, are clearly reflected in the short-term economic development,” said the office in a statement.

“The economy has been languishing for three quarters now. The complete economic recovery from the coronavirus slump is still missing, as is the recovery of the losses in prosperity,” said Alexander Krueger of Hauck Aufhaeuser Lampe private bank.

“As of today, it would already be a success if economic output in the second half of the year continued to stagnate.”

(Reporting by Miranda Murray, editing by Rachel More and Maria Sheahan)

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