London Daily

Focus on the big picture.
Wednesday, Jan 14, 2026

Germany in recession as economy takes biggest hit since crash

Germany in recession as economy takes biggest hit since crash

While the country may face its deepest downturn since World War Two, it is set to fare better than its neighbours.
Germany is officially in recession after its economy shrank by 2.2% in the first quarter of the year as the global coronavirus shutdown began to bite.

The latest official data gives an insight into the damage caused by the COVID-19 pandemic to Europe's biggest economy, with worse expected to come.

The fall over the three months to March was the second-biggest quarterly decline since German reunification in 1990.

It was beaten only by a 4.7% drop in the first quarter of 2009 at the height of the financial crash.

It follows a 0.1% contraction in the fourth quarter, which was revised down from an initial report of zero growth.
Advertisement

That change puts Germany into a technical recession, with two consecutive quarters of economic contraction.

Like other European countries, Germany did not go into lockdown until around mid-March, and so the main impact of the restrictions on people and businesses will only become apparent in the current second quarter.

A 10% economic contraction is widely forecast for the period, although "the exact extent of the slump depends in part on the easing of restrictions on public life", said Albert Braakmann of Germany's federal statistics office.

ING's chief economist for the eurozone, Carsten Brzeski, said: "If today's data are the result of two weeks of lockdown, three more weeks of lockdown and a very gradual lifting of some measures do not bode well for the second quarter."

It strengthens expectations that Germany is facing its deepest recession since World War Two.

But forecasts are worse for other European countries including France and Italy, which are already in recession, after the economies shrank by 5.8% and 4.7% respectively in the first quarter.

Data already released has shown that the 19-nation eurozone's economy shrank by a record 3.8% in the first quarter as the economy ground to halt.

Allianz economist Katharina Utermoehl said in a research note that the German economy looked set to emerge faster and in a stronger position than most of its neighbours.

She pointed out that other nations needed stricter and longer lockdowns and their greater reliance on the services and tourism sectors.

She also said "the decisive and comprehensive policy action on behalf of the German government has been key in limiting the economic damage".

Many German employers were able to switch staff to shorter working hours during the outbreak, avoiding mass redundancies, under the terms of a €750bn (£668bn) government rescue package.

The country's 16 states also chose to allow factories and building sites to remain open.

Recent data showed construction - which accounts for almost 10% of the economy - grew by 1.8% in March.
Newsletter

Related Articles

0:00
0:00
Close
UK Intensifies Arctic Security Engagement as Trump’s Greenland Rhetoric Fuels Allied Concern
Meghan Markle Could Return to the UK for the First Time in Nearly Four Years If Security Is Secured
Meghan Markle Likely to Return to UK Only if Harry Secures Official Security Cover
UAE Restricts Funding for Emiratis to Study in UK Amid Fears Over Muslim Brotherhood Influence
EU Seeks ‘Farage Clause’ in Brexit Reset Talks to Safeguard Long-Term Agreement Stability
Starmer’s Push to Rally Support for Action Against Elon Musk’s X Faces Setback as Canada Shuns Ban
UK Free School Meals Expansion Faces Political and Budgetary Delays
EU Seeks ‘Farage Clause’ in Brexit Reset Talks With Britain
Germany Hit by Major Airport Strikes Disrupting European Travel
Prince Harry Seeks King Charles’ Support to Open Invictus Games on UK Return
Washington Holds Back as Britain and France Signal Willingness to Deploy Troops in Postwar Ukraine
Elon Musk Accuses UK Government of Suppressing Free Speech as X Faces Potential Ban Over AI-Generated Content
Russia Deploys Hypersonic Missile in Strike on Ukraine
OpenAI and SoftBank Commit One Billion Dollars to Energy and Data Centre Supplier
UK Prime Minister Starmer Reaffirms Support for Danish Sovereignty Over Greenland Amid U.S. Pressure
UK Support Bolsters U.S. Seizure of Russian-Flagged Tanker Marinera in Atlantic Strike on Sanctions Evasion
The Claim That Maduro’s Capture and Trial Violate International Law Is Either Legally Illiterate—or Deliberately Deceptive
UK Data Watchdog Probes Elon Musk’s X Over AI-Generated Grok Images Amid Surge in Non-Consensual Outputs
Prince Harry to Return to UK for Court Hearing Without Plans to Meet King Charles III
UK Confirms Support for US Seizure of Russian-Flagged Oil Tanker in North Atlantic
Béla Tarr, Visionary Hungarian Filmmaker, Dies at Seventy After Long Illness
UK and France Pledge Military Hubs Across Ukraine in Post-Ceasefire Security Plan
Prince Harry Poised to Regain UK Security Cover, Clearing Way for Family Visits
UK Junk Food Advertising Ban Faces Major Loophole Allowing Brand-Only Promotions
Maduro’s Arrest Without The Hague Tests International Law—and Trump’s Willingness to Break It
German Intelligence Secretly Intercepted Obama’s Air Force One Communications
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
Fake Mainstream Media Double Standard: Elon Musk Versus Mamdani
HSBC Leads 2026 Mortgage Rate Cuts as UK Lending Costs Ease
US Joint Chiefs Chairman Outlines How Operation Absolute Resolve Was Carried Out in Venezuela
Starmer Welcomes End of Maduro Era While Stressing International Law and UK Non-Involvement
Korean Beauty Turns Viral Skincare Into a Global Export Engine
UK Confirms Non-Involvement in U.S. Military Action Against Venezuela
UK Terror Watchdog Calls for Australian-Style Social Media Ban to Protect Teenagers
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Europe’s Luxury Sanctions Punish Russian Consumers While a Sanctions-Circumvention Industry Thrives
Berkshire’s Buffett-to-Abel Transition Tests Whether a One-Man Trust Model Can Survive as a System
Fraud in European Central Bank: Lagarde’s Hidden Pay Premium Exposes a Transparency Crisis at the European Central Bank
Trump Announces U.S. Large-Scale Strike on Venezuela, Declares President Maduro and Wife Captured
Tesla Loses EV Crown to China’s BYD After Annual Deliveries Decline in 2025
UK Manufacturing Growth Reaches 15-Month Peak as Output and Orders Improve in December
Beijing Threatened to Scrap UK–China Trade Talks After British Minister’s Taiwan Visit
Newly Released Files Reveal Tony Blair Pressured Officials Over Iraq Death Case Involving UK Soldiers
Top Stocks and Themes to Watch in 2026 as Markets Enter New Year with Fresh Momentum
No UK Curfew Ordered as Deepfake TikTok Falsely Attributes Decree to Prime Minister Starmer
Europe’s Largest Defence Groups Set to Return Nearly Five Billion Dollars to Shareholders in Twenty Twenty-Five
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
Diamonds Are Powering a New Quantum Revolution
Trump Threatens Strikes Against Iran if Nuclear Programme Is Restarted
×