Leading institutes define a recession in a slightly more complicated way: they ask how high Germany’s economic output would be in the ideal case, if all workers and machines were used exactly as intended. This is called the production potential. If the economy is in crisis, as is currently the case, it produces less than it really could according to its potential. If this underutilization increases for two straight quarters, the institutes speak of a technical recession.
This has been happening for nine months now, from the third quarter of 2021 to the first quarter of 2022. According to the institute’s forecasts, however, underutilization has fallen again since then, and from 2023 Germany should even find itself in overutilization.