German economy slumps
International trade conflicts and the slowdown in the global economy hit German economy in the second quarter.
Berlin (dpa) – The German economy contracted in the second quarter as a bitter trade war between the United States and China and the threat of Britain crashing out of the European Union hit Europe's economic powerhouse, according to data released on Wednesday.
Gross domestic product (GDP) sunk by 0.1 per cent in the the April-June period compared with 0.4-per-cent growth in the first three months of the year, the Federal Statistics Office (Destatis) said.
The second-quarter slump was in line with analyts' forecasts.
"The export-led manufacturing sector continues to be hard hit by the global slowdown, trade uncertainty and Brexit," said Morgan Stanley economist Markus Guetschow.
It is the second time in the past year that the nation’s economy has contracted, with GDP slumping in the third quarter before stagnating in the final three months of 2018.
Helping to offset the economic fallout from global economic tensions was a solid performance of the domestic Germany economy.
While private consumption grew at a faster pace in the second quarter compared with the first three months of the year, investment also picked up in the three months ended June, Destatis said.
However, the German construction industry also slowed with exports posting a bigger fall than imports during the second quarter, it said.