BERLIN (Reuters) – Germany’s economy stagnated in the fourth quarter and grew 1.9% for the whole of 2022, the federal statistical institute Destatis said on Friday, suggesting the country could narrowly escape a recession, at least this winter.
The 1.9% rise in gross domestic product (GDP) for the year as a whole is slightly above the average forecast of economists polled by Reuters, who had forecast growth of 1.8% in 2022.
“The economic downturn over the winter semester will, according to the data currently available to us, be milder and shorter than expected,” Economy Minister Robert Habeck said in a monthly ministry report.
For Thomas Gitzel, economist at VP Bank, it is “possible” that a recession will be delayed but unlikely that it will not be avoided.
A recession is commonly defined as two consecutive quarters of GDP contraction. The figure of zero growth in the fourth quarter is a first estimate which may be further revised.
However, there are growing signs that the German economy is holding up better than expected to the shock caused by the Russian invasion of Ukraine, which severely disrupted Germany’s gas supply.
German business sentiment rose more than expected in December, according to a survey last month and inflation slowed for the second consecutive month in December, to 9.6% year on year, amid ebbing prices energy and public aid for households.
In 2022, Germany’s public deficit reached 2.6% of GDP in 2022, Destatis also reported.
(Report by Miranda Murray and Maria Martinez, with contributions from Reinhard Becker, Klaus Lauer and Rene Wagner, written by Paul Carrel, French version Dina Kartit, edited by Blandine Hénault)