Germany regains pre-pandemic GDP level after slight Q2 growth

Germany regains pre-pandemic GDP level after slight Q2 growth
# 26 August 2022 04:18 (UTC +04:00)

Germany's gross domestic product (GDP) in the second quarter (Q2) of 2022 grew slightly by 0.1 percent compared with the previous quarter and reached pre-pandemic levels again, the Federal Statistical Office (Destatis) said on Thursday, APA reports citing Xinhua.

The year-on-year GDP growth in Q2 was 1.7 percent adjusted for price and calendar effects.

"Despite difficult framework conditions in the global economy, the German economy held its ground in the first two quarters of 2022," Destatis President Georg Thiel said.

The slight, adjusted growth of the country's economy was supported by government and household spending, Destatis said. Private consumer spending increased by 0.8 percent quarter-on-quarter and government expenditure grew by 2.3 percent.

As Germany has lifted almost all COVID-19 restrictions, "consumers took the opportunity to travel and go out more despite large price increases and the energy crisis."

High inflation, however, is "eating up Germans' additional savings," the ifo Institute for Economic Research warned earlier this week. As prices continue to rise, private consumption would "fail to drive the German economy for the rest of the year," Timo Wollmershaeuser, head of forecasts at ifo, commented.

In the first half of the year (H1), tax revenues already exceeded the pre-COVID-19 (2019) levels. As a result, new debt taken on by Germany's government in H1 fell to 13 billion euros (13 billion U.S. dollars).

In its economic forecast for 2023, Germany's promotional bank KfW lowered its GDP growth projection from 1.2 percent to minus 0.3 percent, assuming "slightly negative" quarterly growth rates during winter in particular.

"A return to a moderate growth path is not expected until spring 2023, when uncertainty about gas supplies will have subsided, production in energy-intensive industries will have been adjusted and rising nominal wages in conjunction with falling inflation rates will again improve real income development somewhat," the KfW said.

#
#

THE OPERATION IS BEING PERFORMED