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Germany enters recession after a poor first quarter

Germany has slipped into a technical recession after its economy contracted by 0.1 percent in the first quarter of 2019, according to official figures released by the Federal Statistical Office on Wednesday.

The contraction follows a 0.2 percent decline in the final quarter of 2018, which was revised up from a 0.4 percent slump in its preliminary estimates.

The weak performance was driven by a decline in exports, falling domestic investments and subdued consumer spending.

Most economists had forecast a return to growth this quarter, but the weak data could put pressure on the government of Chancellor Angela Merkel to increase public investments to boost the overall economy.

Speaking to reporters in Berlin, Merkel said she welcomed the fact that German growth was still positive in the first quarter, but acknowledged that the country was facing an “unequal development.”

The two consecutive quarters of negative growth mark the first time Germany has experienced a technical recession since 2013. Nevertheless, overall growth in 2019 is still likely to be “mediocre” according to the Bundesbank, the central bank.