Berlin (awp/afp) – German gross domestic product (GDP) grew by 0.2% in the first quarter of 2022, despite the “growing” impact of the war in Ukraine. The conflict has caused energy prices to spike and worsen shortages, according to preliminary figures released on Friday.
Germany thus escaped technical recession, after a decline in GDP in the fourth quarter of 2021 of 0.3%, even if “the war in Ukraine is increasingly influencing the economy”, according to a press release from the Destatis Institute of Statistics. . The indicator does better than the forecasts of the financial analyst service Factset, which expected growth of 0.15%.
Over one year, GDP rose sharply by 3.7%. This positive result is explained in particular by “high investments” in the country, according to Destatis.
The economy is buoyed by momentum generated by “the easing of measures against the coronavirus, which has had a positive effect”, comments Jens Oliver Niklash, of LBBW bank. “But with the war in Ukraine, the current data on GDP growth (…) are a glance in the rear view mirror,” comments Carsten Brzeski, expert for ING bank.
Weight of the war in Ukraine
Since February, the first economy in the euro zone has been hit hard by the economic consequences of the war in Ukraine. The export industry, the pillar of its model, is particularly affected.
The invasion has indeed aggravated bottlenecks in many markets, due to sanctions against Russia and production stoppages in Ukraine, which supplies the automotive sector in particular. The war is also causing energy prices to soar, fueling galloping inflation, which reached 7.4% year on year in April, affecting household purchasing power and business income.
All of these phenomena have led the German government to reduce its growth forecasts. He now expects a 2.2% increase in GDP this year, against 3.6% expected in January. The balance sheet could however be much heavier in the event of suspension of Russian gas deliveries, either because of a European embargo, or by decision of Moscow.
According to the Bundesbank, a sudden exit of Russian gas could cost Germany 5 percentage points of its GDP, and the country could then experience a recession of 2%. Germany was 55% dependent on Russian gas for its supply before the war, a figure that the government has recently been able to reduce to 35%.
With growth of 2.8% last year, Germany had performed less well compared to its European neighbors, due to shortages. In 2020, the Covid-19 pandemic led to a 4.6% recession.