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German Q2 GDP contraction confirmed amid sharpest YOY fall in exports in 6 years

The German economy contracted 0.1% in the second quarter, in line with a flash estimate, as prolonged trade tensions weighed on the export-dependent country's growth, data from the Federal Statistical Office showed.

The seasonally and calendar-adjusted contraction follows a 0.4% expansion in the first quarter.

Compared to a year earlier, real GDP stagnated, also in line with provisional data.

Foreign trade dragged growth as price-adjusted exports fell 0.8% year over year, marking the largest decline in six years. In contrast, goods and services imports rose 1.8%.

Final household and government consumption spending rose 1.5% and 1.9%, respectively.

A survey by the ifo Institute yesterday showed that business sentiment in Germany slipped further in August to the lowest since November 2012, adding to mounting fears that Europe's largest economy is headed to a recession.

Last week, the German government bared plans to launch a stimulus program to boost the economy and consumer spending, and prevent large-scale unemployment in the case of a deep recession.