The German economy has slightly shrunk in recent months, after growth in the first quarter. According to statistics bureau Destatis, there was a decrease of 0.1 percent compared to the previous quarter. Germany is the largest economy in Europe and the most important trading partner of the Netherlands.
The growth in the first quarter was due to German exporters exporting significantly more goods to the United States. This happened in the run-up to the import duties of US President Donald Trump. In the second quarter, US demand for German goods was smaller.
Due to the contraction, the German economy is back on a recession course, says ING economist Carsten Brzeski to news service ANP. According to him, the contraction in the second quarter shows the first impact of the American import duties.
The recently reached trade agreement between the US and the European Union offers more certainty for companies, according to Brzeski. But the American basic tariff of 15 percent on most European goods will still have a negative effect, is the expectation.
The economic situation in Germany has not been good for some time. For example, the Germans also faced a contraction in the past two years. Companies in the country suffer from high energy prices, among other things. In addition, the car sector, which is important for Germany, is not doing well.
On Wednesday, figures were also released for the entire Eurozone, where the economy grew by 0.1 percent in the second quarter. The Netherlands experienced the same growth, as was already clear earlier on Wednesday.
France, the second largest economy, grew somewhat stronger, by 0.3 percent. This recovery was due to companies building up their inventories because they feared that they would face higher import duties in the future.