German economy dodges recession in Q1 despite war, pandemic
2022.05.25 09:45
FILE PHOTO: The skyline with its financial district is photographed during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, October 26, 2020, REUTERS/Kai Pfaffenbach/File Photo
BERLIN (Reuters) -The German economy grew in the first quarter, in line with expectations, despite difficult economic conditions caused by the war in Ukraine and the pandemic, data showed on Wednesday.
Europe’s largest economy grew by 0.2% quarter on quarter and by 3.8% on the year, adjusted for price and calendar effects, the Federal Statistics Office said. A Reuters poll had forecast growth of 0.2% and 3.7%, respectively.
The first-quarter growth meant Germany avoided a recession, defined as two quarters in a row of contraction, after gross domestic product (GDP) fell by 0.3% at the end of 2021.
“Despite the difficult global economic conditions, the German economy started the year 2022 with slight growth,” said Georg Thiel, president of the statistics office.
While household and government spending remained mostly at the same level as in the previous quarter and exports were down at the start of the year, investments helped boost the economy.
Construction investments, boosted by mild weather, were up 4.6% from the previous quarter, despite price increases, and machinery and equipment investments also saw a rise, of 2.5%.
The German government in its spring forecast said that it expects overall economic growth in 2022 of 2.2%.
