German economy shrinks by record 10.1%

Germany's economy contracted by 10.1 per cent in the second quarter, its steepest plunge on record.

Preliminary data out Thursday (July 30) showed household spending, business investment and exports all collapsed as a result of the pandemic.

The statistics office said the contraction was the sharpest since 1970 - and worse than the 9 per cent plunge predicted by economists in a Reuters poll.

It wiped out nearly 10 years of economic growth.

Compared with a year ago, GDP fell by 11.7 per cent in the second quarter, seasonally adjusted figures from the Federal Statistics Office showed.

Analysts polled by Reuters had expected an 11.3 per cent contraction.

Both exports and imports of goods and services collapsed from April to June, as did household spending and investment in equipment.

An increase in state spending could only fill some of the resulting hole.

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