German economy contracts 0.3% in 2nd quarter, more than estimated

By Mucahithan Avcioglu

ISTANBUL (AA) - The German economy has shrunk 0.3% quarter-on-quarter in the second quarter of the year, the federal statistical authority stated on Friday.

The figure exceeded the Destatis' preliminary estimates of a 0.1% contraction.

In the first quarter, Germany's gross domestic product (GDP) expanded by 0.4% quarterly, after shrinking by 0.2% in the last quarter of 2024.

"Output in manufacturing and in the construction industry, in particular, was worse than expected," Destatis said in a statement.

Additionally, the final data on the services sectors, such as the June 2025 monthly statistics of lodging and food services, has caused the household final consumption expenditure for the second quarter of 2025 to be revised downward.

"Taken together, the economic indicators provided between the GDP first release and the latest results led to a deterioration of the overall economic picture in the 2nd quarter of 2025," it noted.

In the construction industry, gross value added as a whole decreased by 0.2% on the 1st quarter of 2025. "After a positive start to the year owing to good weather conditions, the construction industry registered a sharper decline (-3.7%) than anticipated in the GDP first release."

The manufacturing sector also posted a decline in the second quarter after expanding in the first quarter.

"Production was down in almost every sector of manufacturing, with only the manufacture of motor vehicles, trailers and semi-trailers and the manufacture of other transport equipment registering slight growth on the previous quarter," Destatis noted.

On the other hand, the country's economy posted a 0.2% growth rate yearly, coming below the estimates of a 0.4% expansion.