Germany’s GDP, Europe’s largest economy, has turned around despite an economic crisis caused by high inflation, the Russia-Ukraine war, and the coronavirus pandemic. As of the third quarter of this year, their gross domestic product (GDP) grew by 0.4 percent. This information was reported by the Central Statistics Office of Germany on Friday.
Germany’s GDP increased in the first and second quarters of the year. A few months ago, many believed that the country’s economy would stumble due to various crises including energy, transportation, and raw materials during the summer. However, how the economic growth of Germany was possible after overcoming the crisis, has surprised economists.
Economists believe that the increase in domestic production is good news for the German economy despite the ongoing corona epidemic, supply disruptions, product price hikes, and the war in Ukraine.
According to the Central Bureau of Statistics:
The growth between last July and September was mainly due to an increase in consumer spending. Despite high inflation and the energy crisis, consumers are taking advantage of the lifting of almost all corona restrictions. The whim of Germans to travel, including buying and selling, has already begun to be seen.
But inflation in Germany at 10.4 percent has become a matter of particular concern. This inflation has led to a slight reduction in consumer purchasing power and led a reduction in private spending in some areas. German government’s promotional bank KFW Chief Economist Fritz Koeller said that despite the possible energy crisis, the German economy is active due to government efforts to ensure an uninterrupted energy supply and the austerity of various institutions. More Latest News
Jörg Kramer, another economist at the German Commerce Bank, said, “I don’t think there will be a recession or a bigger economic decline than before because of the German government’s aid package.”
According to the OECD:
The Organization of Industrialized Countries predicts that the war in Ukraine will slow global economic growth in the coming year. They said there is a risk of pressure on exports as the global economy weakens. As a result, global growth should be only 2.2 percent in 2023, they said. This growth is significantly lower than pre-war expectations. Experts say that due to the Ukraine-Russia war, the world economy has to pay a high price in various areas. Due to this, high inflation and low growth are happening.
Earlier this year, due to the Ukraine-Russia war, many Western European countries, including Germany, were expected to freeze due to a severe economic crisis due to the lack of Russian gas. But in the past six months, other countries, including Germany, have become desperate to find alternatives to Russian gas.
In contrast to Russian gas, Middle Eastern countries and Norway and France are now providing fuel. German Chancellor Olaf Scholz recently told parliament, “This winter our gas reserves are full and energy security is assured for the time being.”