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Germany: Resilient economy, GDP grew more than expected in the quarter

The German economy proved more resilient than initially estimated in the second quarter, growing 0.1% despite rising inflation and the war in Ukraine.

Thursday’s data from the statistics office was better than estimates of stagnation in the quarter to June, though it will do little to ease concerns about the outlook for Europe’s biggest economy.

Growth came from government spending, while household spending also contributed. But the problems for growth are growing stronger, with Russia cutting gas shipments and sending prices soaring, threatening households and businesses.

The Bundesbank stressed this week that Q3 output will be more or less stagnant, while the risk of a contraction in Q4 2022 and Q1 2023 has increased significantly.

Inflation in the meantime may rise to 10% at the end of the year.

On an annual basis, growth came in at 1.7% in the second quarter, against estimates for 1.4%.

Source: Capital

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