The German economy slowed in 2022 but did better than expected with a 1.9% increase in GDP despite the energy crisis and the war in Ukraine which are weighing on activity, according to preliminary figures published on Friday.
“The German economy is recovering despite a difficult environment,” said the Destatis institute.
According to a first estimate, growth ‘stagnated’ during the last three months of the year, avoiding at this stage the dreaded recession in the first economy of the euro zone.
The government was counting this fall on growth of only 1.4% in 2022 with a decline in GDP in the fourth quarter, following growth of 2.6% for the year 2021.
Private consumer spending was ‘the main pillar’ of growth last year, Destatis points out, taking over from a struggling industry.
Up 4.6% from the previous year, these expenses have almost returned to the level before the coronavirus pandemic.
Massive government aid to support purchasing power saved them from collapsing when energy prices soared.
The industry, traditionally the engine of the national economy, was held back until the spring by the persistence of major shortages of components due to disruptions in supply chains.
The situation improved on this front in the second half of the year, but companies were then hit by the energy crisis and inflation which caused their production costs to soar, explained Destatis.
“The economic situation in 2022 was much better than feared,” commented Jens-Oliver Niklasch, economist at LBWW bank, in a note.
‘Nevertheless, the year ahead will be difficult. The war continues, inflation remains high and, recently, industrial orders have fallen. We are going to have our work cut out.
Germany’s public accounts showed a deficit of 101.5 billion euros in 2022, a ratio of 2.6% to gross domestic product.
While the state spent less than expected to cover the effects of the Covid-19 pandemic, it had to face heavy charges related to the energy crisis resulting from the Russian war of aggression in Ukraine, explained Destatis in a statement.
/ATS
