Germany recession news: Germany’s economy, the biggest in Europe, will suffer a recession despite a new government plan to spend €65 billion ($64.49 billion) to support consumers and businesses amid rising inflation, economists say.

The last package of support measures, adopted in response to accelerating inflation after the outbreak of hostilities in Ukraine in February, reached 95 billion euros. Meanwhile, the government has spent 300 billion euros to support the economy in the last two years of the coronavirus pandemic.

Is Germany in a recession? 

Based on the widely accepted definition by economists, a recession is a decline in economic growth for two or more consecutive quarters.

Germany’s economic growth in Q2 was weak, and the conflict in Ukraine, rising energy prices, the pandemic and supply chain disruptions are now pushing the economy into a recession, which may have already happened.

Data released Monday showed that German service sector activity declined for a second straight month in August as domestic demand came under pressure from accelerating inflation and declining consumer confidence.

The shutdown of Europe’s Nord Stream 1 pipeline exacerbates problems in Germany, although the country’s gas reserves have reached 85% of storage capacity, data released Saturday showed. German Chancellor Olaf Scholz said the country “will be able to cope with this (crisis).”

Earlier we reported that the Pound collapsed to its lowest level since 1985.