The German ministry for economic affairs yesterday announced that the German economy has entered a phase of stagnation. GDP fell by 0.5% after adjustment for price, calendar and season in the second quarter 2008 as compared to the first quarter. Major economic indicators fell due to the development of the global economy.
The decrease was in particular due to those fields of the economy which in the first quarter had benefitted from a mild winter, i.e. investment in plant and machinery and in construction. Also decreasing was private consumption which suffered from inflation and reduced propensity to buy.
More detailed information on the situation of the German economy will be published in the October edition of the “Schlaglichter der Wirtschaftspolitik” report which will as usual be linked to as soon as it is published on September 22nd. Selected information on the German economy is already available for download.