Germany's Economy Faces Triple Year Recession Threat

Germany faces economic challenges with its GDP contracting by 0.3% in the second quarter of this year amid reduced demand from the United States. Revised data confirmed the contraction, raising concerns over Germany's economic resilience, particularly under the strain of U.S. tariffs, which have impeded growth prospects.

Efforts by Germany's new government to revive the economy include an 'investment booster' to enhance depreciation options and promises of increased spending in defense and infrastructure, as well as a reduction in corporate taxes. However, the Economy Ministry highlighted the need for additional measures to improve competitiveness and return to growth.

Export figures remain weak, with a decline of 0.1% in the second quarter. The private sector witnessed slight growth driven by manufacturing, but economists suggest that any economic recovery will be moderate, given existing structural challenges and tariff impacts.

(With inputs from agencies.)