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Unexpected shrink in German economy

Unexpected shrink in German economy

New figures show that the German economy unexpectedly shrank by 0.2 percent in the second quarter of this year in a new blow to the eurozone’s recovery from recession.

According to Press TV quoting data released by Germany’s Federal Statistics Office (Destatis) on Thursday, the gross domestic product (GDP) of Europe’s leading economy contracted by 0.2 percent in the period from April to June 2014.

The statistics institution said the recent figures indicate that Germany’s imports grew faster than its imports.

Destatis said “The balance of exports and imports had a negative effect on the German economic development.”

Over the past years, Germany has been praised as Europe’s growth locomotive. However, the country may fall into a technical recession this year if the dispute with Russia over the Ukraine crisis hits Europe’s economy harder in the third quarter of 2014.

Ferdinand Fichtner, an economist at the Berlin-based DIW think tank said “The German economy may have slipped into a slight recession due to crises.”

Meanwhile, France, the eurozone’s second-largest economy, is also enduring a disappointing second quarter. The country’s economic activity is stagnating with zero growth in the first two quarters of 2014.

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