The German economy unexpectedly shrank in the second quarter after skirting a recession at the beginning of the year, showing that the euro zone's biggest economy is failing to take off despite the easing of inflation pressures.
Germany's gross domestic product contracted by 0.1% in the second quarter compared with the previous three-month period, preliminary data from the statistics office showed on Tuesday.
Analysts polled by Reuters had forecast a 0.1% quarter-on-quarter increase in adjusted terms, following 0.2% economic growth in the first quarter.
In a year-on-year comparison, GDP in the second quarter contracted by 0.1%, adjusted for price and calendar effects.
Economists will pay close attention to national inflation data to be released later on Tuesday, ahead of euro zone inflation data on Wednesday.
Economists polled by Reuters forecast Germany's harmonised inflation rate at 2.5% in July, unchanged from a month earlier.
The inflation rate in North Rhine-Westphalia, Germany's most populous state, rose to 2.3% in July from 2.2% in June, suggesting that national inflation could rise this month.
Inflation also rose in Saxony and Baden-Wuerttemberg, but remained unchanged at 2.6% in Brandenburg and 1.8% in Hesse.
Inflation fell only in Bavaria, to 2.5% in July from 2.7% in June.
