German Recession Risk Increases After Surprise Contraction
- Output drops 0.2%; economists had expected stagnation
- Soaring inflation has weighed on households’ spending
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Germany’s economy shrank 0.2% at the end of last year — a worse outcome than previously flagged and one that makes a recession on the back of rising energy bills more likely after all.
The figures Monday from the statistics office contrast with an estimate this month for output to have stagnated in the fourth quarter. They also mean a contraction in the period through March would still produce a recession in the euro area’s largest economy.