BERLIN (Reuters) – The German economy stagnated in the first quarter, as a decline in government and household consumption was balanced out by an increase in exports and capital investment, data showed on Friday.
Gross domestic product was unchanged quarter on quarter in adjusted terms, the federal statistics office said.
A Reuters poll of analysts had forecast growth of 0.2%.
The German economy shrank by a revised 0.5% in the fourth quarter of 2022 compared with the previous three months, reviving fears of a technical recession, defined as two consecutive quarters of contraction.
The International Monetary Fund forecast a recession in Germany and expected GDP to shrink by 0.1% in 2023, while the other euro area economies were forecast to expand.
The German government considered the IMF forecasts “very cautious,” expecting the euro area’s largest economy to narrowly escape a recession.
The German government raised its economic growth forecast for this year to 0.4% from a previously predicted 0.2%, according to its spring economic projections published on Wednesday.
“A gradual recovery is underway, despite a persistently difficult environment,” German Economy Minister Robert Habeck said. He expects an acceleration in growth after the first quarter.
(Reporting by Miranda Murray and Maria Martinez, Editing by Rachel More)
