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ECONOMY

German economy grew more than estimated in third quarter

Germany's economy grew more than previously thought in the third quarter despite high inflation and an energy crisis, revised official data showed Friday.

Lübeck Christmas market
Shoppers stroll through Lübeck Christmas market. Photo: picture alliance/dpa | Markus Scholz

Europe’s biggest economy expanded by 0.4 percent between July and September compared to the second quarter — slightly better than the 0.3 percent growth previously calculated by federal statistics agency Destatis.

Analysts had forecast a contraction in the third quarter as the fallout from Russia’s war in Ukraine takes a toll on European economies.

“Overall, the German economy remains robust,” Destatis said in a statement. Gross domestic  product grew “despite difficult general conditions in the global economy such as the continuing Covid-19 pandemic, delivery bottlenecks, continuing price rises and the war in Ukraine,” it said.

READ ALSO: German recession could be less severe than expected, survey shows

A separate survey on Friday showed that German consumer confidence has edged up again following a long period of decline, the latest indication that concerns are easing about the severity of a approaching downturn.

Pollster GfK’s forward-looking barometer registered minus 40.2 points for December, an increase of 1.7 points from November.

Germany was heavily reliant on Russian gas before the war, and Moscow’s move to cut off flows through the crucial Nord Stream 1 pipeline has fuelled fears of energy shortages and skyrocketing heating bills this winter.

Record-high inflation of 10 percent in September has added to the pain, as consumers and businesses see their purchasing power eroded.

The German government expects the economy to shrink by 0.4 percent in 2023.

READ ALSO: Has Germany’s sky-high inflation finally peaked?

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ECONOMY

German trade surplus shrinks amid Ukraine war and energy crisis

Germany's much-vaunted trade surplus shrank in 2022, official data showed Thursday, as soaring energy prices in the wake of the Ukraine war pushed up the cost of imports.

German trade surplus shrinks amid Ukraine war and energy crisis

Germany exported goods to the value of €1.56 trillion, up 14 percent on a year earlier, federal statistics agency Destatis said in seasonally adjusted figures.

But imports rose by more than 24 percent to €1.48 trillion, resulting in a trade surplus of €76 billion.

Destatis said it was “the lowest surplus” since 2000 and down by more than half compared with last year’s €173.3 billion figure.

The bill for imports rose much more strongly “on account of the sharply increased prices of energy” following Russia’s invasion of Ukraine, the agency said.

READ ALSO: Why fears of a recession in Germany are rising

It is the fifth consecutive year that the trade surplus has narrowed in Europe’s biggest economy, it added.

The United States remained the top destination for “made in Germany goods”, while China was once again the largest source of imports.

The shrinking surplus in export champion Germany comes at a time of growing concern about the competitiveness of European companies in the face of US plans for a major subsidy package to green its economy.

The European Union is working on proposals to counter the threat, including a possible relaxation of state aid rules.

Germany’s BDI industry association on Thursday called for “swift, concrete results” on the issue.

It also urged the government to pursue EU-level trade agreements with “important partners” such as Latin American countries, India or Indonesia to diversify trade ties.

“The aim must be to drive forward the internationalisation of the German economy,” it said.

READ ALSO: Germany sees record post-war inflation in 2022

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