German economy grows in second quarter despite Ukraine war
Berlin, Aug 25: The German federal statistics office (Destatis) announced better-than-expected figures for the German economy in the second quarter on Thursday.
A slight, surprise growth comes despite inflationary pressures and Russia's war against Ukraine driving up energy costs and fueling fears of a coming constriction in supplies leading to a crisis come winter.
A press release by Destatis notes, "gross domestic product (GDP) rose by 0.1% in the 2nd quarter of 2022 on the 1st quarter of 2022 after adjustment for price, seasonal and calendar variations and thus returned to the pre-crisis level of the 4th quarter of 2019."
Household and government spending supported the slight, adjusted growth.
"Despite large price increases and the energy crisis, consumers took the opportunity to travel and go out more," due to the end of most COVID-19 restrictions, Destatis notes.
What does the statistics office say about trade?
GDP increased year-on-year as well, with the second quarter of 2022 showing 1.7% growth compared to the same quarter one year ago.
Foreign trade was also up overall, though exports to Russia took a beating in the second quarter as sanctions came into effect following Russia's invasion of Ukraine.
Much of this foreign trade balance though was offset by an increase in imports over the same period of time.
Gross value added in construction also declined "markedly" by 2.4%, according to Destatis.
The federal statistics office notes that households spent more on semi-durable goods compared to more durable ones like automobiles and white goods, attributing the drop to supply chain crunches.
German households also felt a pinch in the realm of health care as "care costs continued to be high and health insurance costs went up."