The decrease in German GDP in the second quarter was stronger than initially estimated and the setbacks of the industry, struggling with American customs duties, came to erase the embellishment of the first quarter.
Between April and June, the gross domestic product (GDP), corrected for price, seasonal and calendar variations, dropped by 0.3%, according to a press release from the Statistics Institute Destatis published on Friday.
In July, his first estimate for GDP was a decline of 0.1%.
The lull will have been short -lived for the first European economy, whose activity had experienced a 0.3% rebound in the first quarter, also slightly revised down 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.
But “a reversal of this anticipation effect took place and the first complete impact of American customs duties was felt in the second quarter”, analyzes Carsten Brzeski of the ING bank.
Industrial production suffered in the spring, with a decline of 0.3% 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.
Awaiting infrastructure programs
As for exports, they fell 0.1%, increase in services (+1.4%) compensating by falling in goods (-0.6%).
Even if the trade agreement between Brussels and Washington reduces uncertainty, with a rate of 15% customs duties, “the trend will not change much in the third quarter”, plans Mr. Brzeski, while industry in crisis is still struggling 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 in the economy.
In the second quarter, investments decreased 1.9 % in equipment and 2.1 % in construction.
Consumer expenditure has certainly increased by 0.3%, but those of households were less dynamic than expected.
In addition, according to Destatis, recessions of the last two years have been strongly underestimated. In 2023, GDP plunged 0.7% and not 0.1% as an estimated before. For 2024, it dropped by 0.5%, or 0.3 percentage points less than the previous estimate.
This article was published automatically. Sources: ATS / AWP / AFP
