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Container ship off Hamburg: Despite restraint, consumption remains the mainstay
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IMAGO / IMAGO/Nikito
Despite headwinds in the summer, the German economy was able to pick up speed.
The gross domestic product (GDP) increased by 0.4 percent in the third quarter compared to the previous quarter and thus more than initially assumed, as the Federal Statistical Office announced on Friday.
In a first estimate, the Wiesbaden authority assumed a price-, seasonally- and calendar-adjusted increase in economic output of 0.3 percent.
Despite the ongoing corona pandemic, supply bottlenecks, rising prices and the war in Ukraine, Europe's largest economy grew as in the first two quarters of the year (plus 0.8 percent and plus 0.1 percent).
Growth in the period from July to September was mainly driven by private consumer spending.
Despite high inflation and the energy crisis, consumers took advantage of the lifting of almost all corona restrictions in the third quarter, for example to travel more and go out, as the Wiesbaden authorities explained.
However, the Society for Consumer Research points out that the numbers have only increased in comparison to the Corona years.
However, the setback that triggered the crisis has by no means been overcome.
Construction activity subdued
Companies invested significantly more in equipment such as machines.
On the other hand, as in the second quarter, construction investments declined after adjustment for price, seasonal and calendar effects.
High building prices and higher mortgage interest rates are dampening business.
Many economists expect a frosty winter half-year in Europe's largest economy.
They are assuming a decline in economic output, but are not expecting an economic crash like in the Corona crisis year 2020. At that time, gross domestic product shrank by more than four percent for the year as a whole.
“But slumps like those in the financial or corona crisis are only likely in the event of a gas shortage, and thanks to full storage facilities and, above all, considerable savings efforts by companies and households, we should be able to avoid them,” said KfW chief economist Fritzi Köhler-Geib recently.
Commerzbank chief economist Jörg Krämer also referred to the federal government's relief package.
"I still expect a recession, but more than ever no economic collapse."
The persistently high rate of inflation, which rose to 10.4 percent in October, is of particular concern.
High inflation rates are a burden for companies and reduce the purchasing power of consumers.
That should dampen private consumption, which is an important pillar of the economy.
At the same time, according to economists, the weakening of the global economy is likely to put pressure on exports.
According to a forecast by the OECD, the organization of industrialized nations, global economic growth will be slowed down in the coming year by Russia's war of aggression against Ukraine.
Accordingly, global growth in 2023 should only be 2.2 percent.
That is significantly less than expected before the war.
"Higher inflation and lower growth are the hefty price the global economy is paying for Russia's war against Ukraine," the recently published study said.
Thanks to the growth of the past quarters, the federal government most recently expected an increase in economic output of 1.4 percent for the full year 2022.
As a result of the expected weak winter half-year, a decline in gross domestic product of 0.4 percent compared to the previous year is predicted for the coming year.
mik/dpa-AFX
