German economy grew better than estimated in second quarter

Output expanded by 0.1 per cent in April-June against projection of zero growth



Photo: Reuters
Photo: Reuters

By AFP

Published: Thu 25 Aug 2022, 12:03 PM

Last updated: Thu 25 Aug 2022, 9:20 PM

Germany's economy grew slightly in the second quarter — an upgrade from a previous estimate of stagnation — revised official data showed on Thursday, pushing back the spectre of recession.

Output expanded by 0.1 per cent in the April to June period, according to the federal statistics agency, which had previously projected zero growth.

The economy was propped up by both private and public domestic demand, with spending by the state up by 2.3 per cent. Private spending rose by 0.8 per cent from the previous quarter, as the end of Covid-19 restrictions brought more tourism and outdoor dining.

Europe's biggest economy has been slowing as inflation soars, with the Russia-Ukraine conflict sending energy and food prices through the roof.

Germany has been highly reliant on supplies of Russian gas to meet its energy demands, but Moscow has slowly reduced supplies since the start of the war.

The threat that Russia could cut deliveries completely has raised the possibility of shortages over the winter, and brought Germany closer to rationing supplies, with a punishing impact on business.

Bundesbank president Joachim Nagel had warned in a recent interview that although the German economy held up well in the second quarter, new supply chain problems would "further darken the outlook for the second half".

Particularly, if the energy crisis were to worsen, "a recession appears probable for the coming winter", he added.

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