German Economy Shrinks in Second Quarter

The German Statistical Office announced on Wednesday that gross domestic product (GDP) contracted by 0.1% in the second quarter of this year compared to the first quarter.

This contraction follows an unexpectedly slight rebound at the beginning of the year, which was revised down from 0.4% to 0.35% by the office.

The growth in the first quarter was attributed to the preemptive effects of US President Donald Trump’s announcement at the time of his intention to impose tariffs on the European Union.

During that period, the US administration imposed unilateral tariffs of 15% on EU imports, amid negotiations with the European Commission.

The Statistical Office explained that investments in equipment and the construction sector witnessed a significant decline during the period from April to June compared to the previous quarter, while both private and government consumption increased.

Separately, the Federal Statistical Office in Wiesbaden revealed that retail sales in Germany increased in June compared to the previous May, with sales growing by 1% in real terms. On an annual basis, sales after adjusting for price changes rose by 4.9% in June. Excluding price changes, retail sales rose by 5.8%. Grocery retail sales rose by 0.9% in real terms, while online and mail-order sales grew significantly more, by 20.4%. Non-food stores achieved a 7.4% increase in sales in June compared to the previous year.