Status: 04/29/2022 10:26 am
Despite the consequences of the war, there has not yet been a recession in Germany. In the first three months of the year, economic output increased at least somewhat.
Despite the Corona wave and the beginning of the Ukraine war, the German economy started the year with slight growth. Between January and March, the gross domestic product (GDP) rose by 0.2 percent compared to the previous quarter, as the Federal Statistical Office announced today based on an initial estimate. According to the statisticians, higher investments in particular contributed to the positive development at the start of the year. Since the end of February, the economic effects of the war in Ukraine have been increasingly weighing on the economy.
Economists had only expected growth of 0.1 percent. Contrary to what some experts feared, the German economy has not slipped into recession. In the final quarter of 2021, economic output fell by 0.3 percent. A recession occurs when gross domestic product shrinks for at least two quarters in a row.
Gloomy prospects
For the current year, most experts are expecting economic growth in Germany. But the uncertainty about the consequences of the war and the sanctions imposed by the West on Russia is enormous. High inflation due to rising prices for energy and raw materials is a burden for companies and consumers. In April, inflation had increased – consumer prices by 7.4 percent compared to the same month last year.
The federal government has already significantly lowered its estimate of economic growth for the current year: GDP will only grow by 2.2 percent in 2022, said Federal Minister of Economics Robert Habeck from the Greens at the presentation of the spring projection this week. That is 1.4 percentage points less than assumed in the annual economic report in January. For 2023, the government only expects growth of 2.5 percent.