The German Economy Ministry warned that high energy prices and interest rates had taken their toll, despite rising demand.
ING analyst Carsten Brzeski said the latest data was “another illustration of the country’s ongoing stagnation” adding that it could also be an omen of further bad news for gross domestic product (GDP).
“With today’s numbers, the risk has increased that the flash estimate of stagnating GDP growth in the second quarter could still be revised downwards,” Brzeski said.
“The poor mood among companies indicates persistent lethargy,” said the Hauck Aufhäuser Lampe private bank’s chief economist, Alexander Krüger.
As the energy crisis precipitated by Russia’s invasion of Ukraine began to bite, bringing higher inflation and interest rates, Europe’s largest economy unexpectedly slid into recession in late 2022 and early 2023.
On the positive side in the latest figures, pharmaceutical industry output boosted the overall result with growth of 7.9% after production fell by 13.3% in May.