German economy shrank 2.2 percent q/q

The German economy shrank by 2.2 percent in the first quarter compared to the previous quarter. The cause of the downturn is the corona crisis. The German Federal Statistical Office confirmed with the final figures the previously released preliminary estimates.

The shrinkage figure corresponds to the average expectation of economists. In the fourth quarter of 2019, the gross domestic product of the largest economy in Europe shrank by 0.1 percent, officially kicking off the German economy. The statistics bureau previously reported that the shrinkage was the largest since the 2009 financial crisis.

Consumer spending declined by 3.2 percent. That decrease was the largest ever recorded. Due to the uncertainty and the closure of many shops and catering establishments, Germans kept their hands on the money. Government spending increased by 0.2 percent.

The German economy is expected to take a much heavier blow in the second quarter. In the first quarter, corona measures were in effect for only a few weeks. To counteract the negative impact of the crisis on the economy, the German government has announced extensive support packages for companies.