By Max Bernhard
Germany's economy shrank in the second quarter as trade dragged down economic growth amid worries that the country could slip into a recession.
Europe's largest economy contracted 0.1% from the previous quarter, as foreign trade slowed down economic growth despite robust consumption at home, according to a first estimate published Wednesday by national statistics agency Destatis.
The gross domestic product grew 0.4% on year in 2Q, the agency said.
Higher private and government consumption and higher investments contributed positively in the quarter, but trade and a decline in construction dragged down the economy as exports decreased stronger than imports, Destatis said.
"Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knee. In particular, increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity," ING Chief Economist for Germany Carsten Brzeski said.
The economic data will increase pressure on Germany's government to act amid calls for a stimulus package, he said.
Write to Max Bernhard at email@example.com; @mxbernhard
Corrections & Amplifications
Story corrected at 0657 GMT because the misstated that GDP grew 0.4% in annualized terms.