Real GDP growth in Germany for 2022 exceeds expectations amidst slower recovery
The Bundesbank in the monthly newsletter for January, published this Monday (01.23.2023), revealed that the real Gross Domestic Product (GDP) of Germany could have stagnated in the last quarter of 2022 and surpassed previous expectations, despite increased inflation and the Russian invasion of Ukraine.
German central bank economists believe that logistical problems in industry and construction were less significant and government aid packages to curb electricity and gas prices have mitigated the effects of higher energy prices for households and companies. This has allowed the economic output to increase by 1.9% compared to the previous year and slightly exceeded the pre-pandemic level.
Despite this positive news, the recovery still remained weak. Consumer demand had slowed down as a result of high inflation and this has been reflected by the decreased turnover of retailers and gastronomy in October and November compared to the summer quarter.
Exports, investments in technical installations, machinery and vehicles have helped Germany’s economic growth while institutions such as KfW have warned of potential shortcomings in the labour market that could lead to future stagnation.
Overall, the report has presented both positive and negative outlooks for the nation’s economic situation and further updates in the upcoming months will be crucial for understanding the overall impact.