German economy slips back into negative growth

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Germany's economy shrank during the April-to-June period of this year.

A decline in exports dampened growth, according to official data, which comes amid concerns of a global slowdown.

Gross domestic product (GDP) fell by 0.1% compared with the previous quarter, according to the Federal Statistics Office.

That takes the annual growth rate down to 0.4%. Germany, Europe's largest economy, narrowly avoided a recession last year.

Early signs for the third quarter "look ominous", said Andrew Kenningham, chief Europe economist at Capital Economics. "Manufacturing business surveys for July were all gloomy.

"And while the services sector should continue to hold up better, there are some signs that the slump is spreading to the labour market."

While the overall figures were negative, household and government expenditure and investment outside the construction sector, all increased.

Construction itself fell after an unusually good first three months, boosted by a mild winter.

"The development of foreign trade slowed down economic growth because exports recorded a stronger quarter-on-quarter decrease than imports," the statistics office said.

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