BERLIN (Reuters) – German economic output likely stagnated in the final quarter of last year and grew by 1.9% over the full-year 2022, the Federal Statistics Office said on Friday, suggesting Europe’s largest economy may just escape a recession over the winter.
The 1.9% full-year increase in gross domestic product (GDP) compared with the mid-range forecast in a Reuters poll of economists for 1.8% growth in 2022.
The initial fourth quarter readout suggests Germany may just avoid a recession — defined as two successive quarters of contraction.
There have been growing signs that the economy, which grew in the third quarter, could stave off the worst of a downturn triggered by a plunge in energy supply from Russia after the Ukraine invasion.
Business morale rose more than expected in December as the outlook for the economy improved despite the energy crisis and high inflation, a survey showed last month.
Earlier this week, government economic adviser Monika Schnitzer told Reuters inflation in Germany has probably peaked as global energy prices have fallen, adding that she expects natural gas prices to continue to fall this year.
German inflation eased for a second month in a row in December due to falling energy prices and the government’s one-off payment of household energy bills, with EU-harmonized consumer prices rising by 9.6% on the year.
Germany’s state deficit ratio registered 2.6% of GDP in 2022, the Statistics Office added.
(Reporting by Miranda Murray and Maria Martinez; Writing by Paul Carrel, editing by Kirsti Knolle)
