The German economy shrank by 0.3% in the second quarter compared with the previous three-month period, official data showed Friday, a significantly worse showing than was initially reported as tensions with the U.S. over tariffs simmered.
Full data showed output in manufacturing and the construction industry was worse than expected in June and household spending for the quarter also was revised downward, the office said Friday. The decline followed growth of 0.3% in the first quarter.
ING economist Carsten Brzeski said “after the surge in economic activity resulting from the U.S. front-loading of German exports in the first quarter, the economy experienced a reversal of the front-loading effect, and the first full-blown impact of U.S. tariffs (implemented in the second quarter) took effect.”
It could “take until next year before a more substantial recovery starts to unfold,” he said.
