Germany’s GDP contracted by 0.3% in Q2, a notable decline from the previous quarter’s 0.3% growth. This 0.6 percentage point swing highlights a significant downturn in economic activity.
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The actual GDP contraction was worse than the analyst estimate of a 0.1% decline, signaling potential market turbulence. Sectors sensitive to economic cycles, such as industrials and consumer discretionary, are likely to face pressure. This unexpected contraction may prompt concerns about longer-term growth prospects, influencing both sentiment and policy expectations.