Economists said high inflation had hit consumer spending, with prices in April 7.2% higher than a year ago. Photo: rawpixel.com

New figures show that the German economy suffered an unexpected drop in the first quarter of this year, officially putting the country in recession.

Data released on 25th May by the Federal Statistical Office show that Germany’s gross domestic product, or GDP, fell by 0.3% in the period from January to March. This follows a 0.5% decline in Europe’s largest economy in the final quarter of 2022. Two consecutive quarterly declines constitute a technical recession.

The figures are a blow to the German government, which last month boldly doubled its growth forecast for this year after the dreaded winter energy crisis failed to materialise.

He said GDP would expand by 0.4% – against a 0.2% expansion forecast at the end of January – a forecast which may now need to be revised downwards.

Economists said high inflation had hit consumer spending, with prices in April 7.2% higher than a year ago.

GDP reflects the total value of goods and services produced in a country. Some experts question whether the figure alone is a useful indicator of economic prosperity given that it does not distinguish between types of spending.