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dated: 2022-11-25 08:03:34 .
(Bloomberg) — The German economy proved more resilient in the third quarter than initially reported, growing 0.4% on strong consumer spending.
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The initial reading of 0.3% was already a positive surprise, defying the country’s struggle with rising energy costs and uncertainty fueled by Russia’s war in Ukraine. Data released on Friday showed that growth was mainly driven by household spending, which rose 1% over the three-month period.
“Despite continued strong price growth and the growing energy crisis, consumers took the opportunity to travel and go out more,” the statistics office said in a statement. “The German economy remains strong.”
The coming months are expected to be even more challenging: Europe’s largest economy will suffer a wider recession as businesses and households collapse under the surge in energy prices. However, according to the Bundesbank, their extent is “extremely uncertain” and the risk of damaging natural gas shortages has been reduced thanks to unusually warm autumn weather and nearly full storage facilities.
Chancellor Olaf Scholz’s government is also preparing extensive measures to promote gas and electricity to ease the burden on incomes caused by the highest inflation since the introduction of the euro.
The Ifo institute’s business expectations indicator rose on Thursday, reflecting optimism that the recession may be less severe than first feared. In a survey of purchasing managers from S&P Global, sentiment did not worsen this week more than economists had predicted.
– With the support of Kristian Siedenburg and Bryce Baschuk.
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The German economy was stronger than expected in the third quarter
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