The German economy proved more resilient in the third quarter than originally reported, growing 0.4 percent on strong consumer spending.
The initial reading of 0.3 percent was already a positive surprise, defying the country’s struggles with rising energy costs and uncertainty fueled by Russia’s war in Ukraine. Data released on Friday showed that growth was mainly driven by household consumption, which rose 1 percent from the previous quarter.
“Despite continued sharp price increases and the widening energy crisis, consumers have seized the opportunity to travel more and go out,” the statistics office said in a statement. “The German economy remains robust.”
The coming months are expected to be more challenging: Europe’s largest economy will experience a general recession as businesses and households collapse under the impact of soaring energy prices. According to the Bundesbank, however, the extent of this is “extremely uncertain” and the risk of a damaging natural gas shortage has declined thanks to unusually warm autumn weather and almost full storage facilities.
The government of Chancellor Olaf Scholz is also preparing extensive measures to promote gas and electricity in order to cushion the burden on income caused by the highest inflation since the introduction of the euro.
An indicator of business expectations from the Ifo institute rose on Thursday, reflecting optimism that the recession could be less severe than initially feared. In surveys of purchasing managers from S&P Global, sentiment did not deteriorate any further this week than economists had forecast.
https://www.independent.ie/business/world/germanys-economy-stronger-than-expected-in-third-quarter-42172784.html Germany’s economy stronger than expected in the third quarter