May 25, 2022 03:46AM ET
By: AnalysisWatch
According to the data, the German economy grew modestly year-on-year in the first quarter, with higher investment offset by the double impact of the war in Ukraine and COVID-19, which experts forecast would hit hardest in the three months to June.
Europe's largest economy grew at a quarter-on-quarter adjusted rate of 0.2% and 3.8% year-on-year, the Federal Statistical Office said on Wednesday. A Reuters poll had forecast 0.2% and 3.7%, respectively.
The figure meant Germany avoided a recession, often defined as two consecutive quarters of quarterly contraction, after gross domestic product (GDP) fell 0.3% at the end of 2021.
While household and government spending remained mostly flat compared to the previous quarter and exports fell at the start of the year, investment rose.
Buoyed by mild weather, construction investment rose by 4.6% from the previous quarter despite rising prices, and investment in machinery and equipment increased by 2.5%.
According to an Ifo Institute survey published this week, which found no obvious signs of recession, German business morale unexpectedly improved in May as the German economy showed resilience.
The GfK Institute's consumer sentiment index rose slightly from May's all-time low ahead of June, with household spending weighed down by inflation.
The government forecasts economic growth of 2.2% for 2022.