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Berlin - The German economy suffered a surprise contraction in the second quarter, its first in more than a year, raising new doubts about Europe's recovery after data showed Italy sliding back into recession and French economic activity stagnating.
Foreign trade, which has traditionally been a driver of German growth, and investment, particularly in the construction sector, were to blame for the 0.2% decline in gross domestic product (GDP), the Federal Statistics Office said.
Economists polled by Reuters had been expecting the economy to stagnate in the quarter after the first three months of the year were boosted by mild winter weather.
"The German economy may have slipped into a slight recession due to crises," said Ferdinand Fichtner, economist at Germany's DIW think tank.
According to a survey conducted before German and French data was released, the euro zone is expected to grow by 0.1% in the second quarter after growth of 0.2% in the first quarter. That data is due at 11:00.
Last week, Italy reported a 0.2% drop in second quarter GDP. The French economy stagnated in the quarter, data released on Thursday showed, prompting Finance Minister Michel Sapin to acknowledge that the country would miss its public deficit target this year.
In Germany, domestic demand was the only bright spot in the quarter. Public consumption rose slightly and consumers benefitting from a strong labour market, rising wages and low inflation, splashed out more cash, the Statistics Office said.
But the Office said it had revised down the first quarter growth figure to 0.7%, from a previously reported expansion of 0.8%.
The German economy proved a bastion of strength throughout much of the euro zone crisis but it slowed towards the end of 2012 and had a subdued year in 2013.
The government is, however, expecting growth to pick up to 1.8% this year - more than four times faster than last year.
Other recent data has disappointed, with industrial orders suffering their sharpest fall in nearly three years, and output and exports rising only modestly while investor and business morale has darkened as the Ukraine crisis takes its toll.
A string of German companies, including consumer goods group Henkel, optical systems maker Jenoptik and generic drug maker Stada, have complained about the crisis hitting business in recent weeks.
