Economic data, published today, Thursday, showed that the German economy performed better than estimates during the second quarter of this year, as it recorded a growth rate of 0.1% of GDP, despite the high inflation rate and the war in Ukraine.
And Bloomberg news agency reported that the data of the German Federal Statistics Office released on Thursday on gross domestic product came in better than initial estimates, although it did not dispel fears of a recession in Europe’s largest economy.
The growth of the German economy during the second quarter of this year was driven by government spending with the continued contribution of consumer spending, but the headwinds to growth are getting stronger, with Russia reducing natural gas supplies to Europe, including Germany, which casts a heavy shadow on the economic prospects, with Consumer prices are rising at record rates.
Earlier this week, the Bundesbank announced an even bleaker outlook for the German economy.
The bank wrote in its monthly report for the month of August that a decline in economic output in the winter “has become more likely.”
The bank’s economists explained that “economic development in Germany will be negatively affected in the summer quarter and beyond by unfavorable developments in the gas market.”
The bank expects Germany’s GDP to make no progress in the period from July to September 2022.
The Bundesbank expects that “the high level of uncertainty regarding gas supplies in the coming winter and sharp price increases are likely to put significant pressure on households and businesses.”
The bank now assumes that Germany’s inflation rate might reach 10% in the fall, energy prices have soared as a result of the Ukraine war and food price hikes have fueled inflation for months.
