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Industrial Policy

German economy stagnates in second quarter as France resumes growth

FRANKFURT — German economic growth ground to a halt in the second quarter of this year, disappointing expectations of a slight expansion, according to data released by Germany’s statistics office Friday.

After posting 0.8 percent growth in the first quarter of the year, Europe’s largest economy stagnated.

“Difficult global economic conditions with the ongoing corona pandemic, disrupted supply chains, rising prices and the war in Ukraine are clearly reflected in economic developments,” the statistics office said.

The German release follows French GDP data, which showed the eurozone’s second largest economy expanding 0.5 percent in the second quarter after contracting 0.2 percent from January to March.

Meanwhile, the Spanish economy expanded by 1.1 percent on the quarter, its statistics office reported this morning.  

The first second-quarter growth estimate for the wider eurozone is due to be released at 11:00 CET. A Reuters survey of analysts conducted before national data became available showed that they expect growth to slow to a near halt of 0.1 percent, from 0.6 percent in the previous quarter.

As the gas crisis is unfolding, growth is set to slow significantly further ahead. The latest PMI survey suggested that eurozone business activity contracted in July.  

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