The German economy shrank by 0.1 percent in the first quarter of 2019, according to recent data, which has been cited as a sign that Europe’s largest economy is in recession. Analysts warn that Germany’s vulnerability to events outside of its borders, such as geopolitical tensions and trade disputes, presents a real risk of prolonged economic downturn.
This is the third consecutive quarter of economic contraction in Germany, which is the technical definition of a recession. GDP was expected to remain flat in the first quarter, but was dragged down by a number of factors, including a decline in industrial production and business investment, and weak global demand.
The German government has implemented a number of measures to try to improve growth, such as cutting taxes and increasing public spending. However, these stimulus measures may not be enough to prevent an extended downturn. Some economists argue that the government needs to undertake more comprehensive steps to boost the economy, such as investing in infrastructure or introducing more flexible labor policies.