Surprisingly, the German economy grew slightly in the second quarter. The gross domestic product (GDP) rose by 0.1 percent compared to the previous quarter, as announced by the Federal Statistical Office. In a first estimate, the Wiesbaden authorities assumed that economic output would stagnate.
At the beginning of the year there was an increase of 0.8 percent. “Despite the difficult global economic conditions, the German economy held its ground in the first two quarters of 2022,” said Destatis President Georg Thiel. Compared with the fourth quarter of 2019, i.e. the quarter before the start of the corona pandemic, it shows that GDP in Germany reached the pre-crisis level for the first time in the spring.
According to the office, the economy was mainly supported in the spring by private and government consumer spending. Trade with other countries also increased. Although significantly fewer goods were exported to Russia in the second quarter than at the beginning of the year under the impact of the war in Ukraine, companies reported stable exports overall: Despite the disrupted global supply chains, 0.3 percent more goods and services were exported than in the first Quarter. However, imports increased more sharply by 1.6 percent compared to the previous quarter.
The cash position of the state also improved significantly in the first half of 2022. Based on the total economic output, the deficit of the federal, state, municipal and social security funds was 0.7 percent, as the Federal Statistical Office announced on Thursday based on preliminary calculations. A year earlier, a drop of 4.3 percent was recorded, mainly because of the billions in corona aid.
The Bundesbank expects that economic output will “roughly remain flat” in the summer and that there could be a recession in the winter half-year as a result of the gas crisis. The Russian war against Ukraine, which has been going on for six months, will also burden the German economy for years to come, as DIW President Marcel Fratzscher recently said in a Reuters interview.