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What Germany’s dismal GDP means for Europe and interest rates

New figures confirm the lackluster performance of the German economy hit by rising trade fears

A robot mounts a windshield on a Mercedes Benz A Class on the assembly line at the Daimler factory in Rastatt, southwestern Germany
A robot mounts a windshield on a Mercedes Benz A Class on the assembly line at the Daimler factory in Rastatt, southwestern Germany Photo: Getty Images

Germany’s gross domestic product shrank 0.1% in the second quarter of the year, confirming the lackluster performance of the German economy hit by rising trade fears, the slowdown of Chinese imports and home-grown industrial and economic problems.

The GDP decline, expected as it was by most economists, puts Germany at risk of a technical recession this year (defined by two consecutive quarters of declining GDP) and contrasts with the overall eurozone’s 0.2% GDP growth in the three months to June.

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