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Due to consumers’ lower spending in Europe’s largest economy, Germany experiences a recession

The German economy has fallen into a recession with gross domestic product declining by 0.1 per cent in the second quarter of 2019. The news, confirmed by the country’s Federal Statistics Office, comes after the German economy shrank by 0.5 per cent in the first quarter as weaker domestic demand and a slowdown in global trade weighed on growth.

Consumer spending, which accounts for more than half of the German economy, has been especially weak as households become more hesitant about spending in the face of global economic uncertainty. Other factors such as a decline in investment and exports have also played a role in dampening growth.

The recession marks the third in the past decade for the German economy, which is Europe’s largest. The governments of Chancellor Angela Merkel and her successor, Annegret Kramp-Karrenbauer, have sought to implement measures to mitigate the economic downturn, such as tax cuts and infrastructure spending. These measures have yet to have a meaningful impact though, as consumer sentiment remains weak and the global economic outlook remains uncertain.