Germany Officially Enters Into a Recession: Latest Report (2025)

Germany officially entered a recession in the first quarter of 2025. According to the German statistics office on Thursday, Q1 2025 GDP (gross domestic product) was revised downwards.

Data from the German statistics office on Thursday showed a downward revision to GDP from zero to -0.3% for the first three months of the year, confirming that Germany has slipped into recession as last year’s energy price shock takes its toll on consumer spending. Output in Europe’s largest economy dropped 0.3% in the first quarter. Official numbers published Thursday showed that Europe's largest economy fell into a recession. Inflation and higher interest rates were blamed, as well as concerns over the U.S. economy.

The recession in early 2025 comes after household spending in Europe's economic engine finally succumbed to the pressure of high inflation. Germany's inflation rate stood at 7.2% in April, above the euro area's average but below the UK's 8.7%. Higher prices have weighed on household spending on non-essential items.

Looking ahead, The Bundesbank expects the gas supply situation to remain extremely tight in the coming months. As things currently stand, though, it was just about possible to avoid formal steps towards rationing of gas thanks to larger deliveries from other countries and progress in energy efficiency and gas storage. However, this situation remains precarious.

Ver más BERLIN, May 25 (Reuters) - The German economy faces significant challenges as it navigates this period of economic contraction. Experts are closely monitoring the situation to assess the potential duration and severity of the recession.