Germany’s economy contracted in the second quarter, figures showed Wednesday, highlighting its vulnerability to trade tensions and stoking a debate on higher government spending.
At minus 0.1 percent, the performance matched forecasts from analysts surveyed by Factset, after output grew 0.4 percent in January-March.
Weak growth for Germany places it alongside Britain, down 0.2 percent in the quarter, in a group of trailing European nations.
In the eurozone, Berlin has fallen from being the model pupil to lagging Italy’s standstill economy and France which posted 0.2 percent growth.
Recent days and weeks have brought a slew of negative indicators for Germany, with measures of exports and manufacturing especially hard hit.
Machine-tool makers — the country’s second-largest industrial sector after cars — reported 22 percent fewer orders between April and June, their federation said Tuesday.
Similar factors to those sapping other top industries such as cars and chemical firms are at work, including a global growth and trade slowdown accelerated by political tensions.
But the factory outfitters have also been undermined by an automotive industry transitioning towards electric vehicles away from the combustion engine.
“Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knees,” ING bank economist Carsten Brzeski commented.
While federal statistics authority Destatis will only provide a detailed GDP breakdown later this month, its broad-stroke report showed higher household and government spending supported expansion, while weaker trade was a brake on growth.