Germany sees unexpected growth in 3rd quarter; inflation up

Oct 28, 2022, 2:01 AM | Updated: 10:24 pm
Cars and containers are pictured at the 'duisport logport' logistics center at the river Rhine in D...

Cars and containers are pictured at the 'duisport logport' logistics center at the river Rhine in Duisburg, Germany, Friday, Oct. 28, 2022. (AP Photo/Michael Sohn)

(AP Photo/Michael Sohn)

BERLIN (AP) — The German economy grew in the third quarter, an unexpectedly positive performance powered largely by private spending, official figures showed Friday. But the immediate outlook for Europe’s biggest economy remained gloomy, with inflation rising again in October.

Gross domestic product expanded by 0.3% in the July-September period compared with the previous quarter, the Federal Statistical Office said. That followed a slight increase of 0.1% in the second quarter.

“The German economy managed to hold its ground despite difficult framework conditions of the global economy, with the continuing COVID-19 pandemic, supply chain interruptions, rising prices and the war in Ukraine,” the statistics office said.

The government said earlier this month that GDP was believed to have shrunk in the third quarter and was expected to decline again in the last three months of the year as well as the first three months of 2023 before beginning to recover. Two consecutive quarters of negative growth is one technical definition of recession.

With energy prices high, Germany — like many other countries — is grappling with skyrocketing inflation. The annual inflation rate rose once again in October, climbing to 10.4% from 10% the previous month, according to a preliminary estimate released by the statistics office on Friday.

On Tuesday, a survey showed German business confidence stuck at its lowest level in more than two years as energy worries fuel expectations of a difficult winter.

Lawmakers last week cleared the way for the government to provide up to 200 billion euros ($195 billion) in subsidies to households and businesses through 2024 to ease the strain of high energy prices, and parliament’s upper house added its approval on Friday. However, details of that plan haven’t yet been finalized.

Officials say Germany is well-placed to get through the winter with sufficient energy after Russia cut off natural gas supplies but stress that it will still need to conserve the fuel that heats homes, powers factories and generates electricity.

“Looking ahead, the surprise growth in the third quarter does not mean that the recession narrative has changed,” ING economist Carsten Brzeski said. “All leading indicators point to a further weakening of the economy in the fourth quarter and there doesn’t seem to be any improvement in sight.”

“Pent-up demand and savings from past lockdown periods provided sufficient counterweight to the dampening influence of sharply rising inflation, thus delaying the start to the recession that we nonetheless continue to expect during the next two quarters,” said Timo Klein, an economist at S&P Global Market Intelligence.

In a speech Friday, President Frank-Walter Steinmeier told Germans that “we face harder years, rough years” in a more confrontational world. “The peace dividend has been used up.”

Steinmeier, whose post is largely ceremonial but holds moral authority, pointed to Germany’s economic strength and its efforts to ease the financial strain on its people, but said “even our state won’t be able to compensate for every burden.”

“It is clear that we will have to put up with constraints in the coming years,” he said.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

In this photo provided by Chad Fish, a large balloon drifts above the Atlantic Ocean, just off the ...
Associated Press

Not just balloons: How US sees China spying as major worry

WASHINGTON (AP) — The Chinese balloon that traversed the United States before being shot down last weekend captivated public attention and drew sharp denunciations as a brazen spying effort. But if the vehicle for espionage seemed novel, the concept was anything but. In ways that are far less public, but often more worrisome, U.S. officials […]
11 hours ago
FILE - Queen Margrethe attends the Danish Parliament's celebration of her 50th Regent's Anniversary...
Associated Press

Danish queen to undergo ‘major back surgery’

COPENHAGEN, Denmark (AP) — Denmark’s Queen Margrethe II, whose half-century reign makes her Europe’s longest-serving monarch, will undergo “major back surgery” later this month, the royal palace said Wednesday. The 82-year-monarch will be hospitalized afterward and undergo “a longer rehabilitation process,” the royal household said in a statement. “During a long period, Her Majesty has […]
11 hours ago
Associated Press

Blaze at US drone plant in Latvia; arson not suspected

HELSINKI (AP) — Firefighters worked for a second day Wednesday to fully extinguish a blaze at a U.S. company’s drone plant in Latvia, as police said no indications of sabotage have been found so far. Latvia’s State Fire and Rescue Service was alerted Tuesday afternoon that a fire had broken out at Edge Autonomy’s drone […]
11 hours ago
FILE - People walk past a Microsoft office in New York on Nov. 10, 2016.  (AP Photo/Swayne B. Hall,...
Associated Press

Microsoft’s Activision deal hurts gamers, UK watchdog says

LONDON (AP) — Microsoft’s stalled $68.7 billion deal to buy video game company Activision Blizzard has hit a fresh hurdle in the United Kingdom, where the antitrust watchdog said Wednesday that it will stifle competition and hurt gamers. Britain’s Competition and Markets Authority said its in-depth investigation found that the deal could strengthen Microsoft’s position […]
11 hours ago
FILE - The Container ship Cam Cgm Arctic (MT) is moored at Maersk APM Terminals Pacific, Pier 400, ...
Associated Press

Shipper Maersk reports most profitable year, warns of drop

COPENHAGEN, Denmark (AP) — The world’s biggest shipper, Denmark’s A.P. Moeller-Maersk, said Wednesday that 2022 was its most profitable year in “the history of the company” but warned that a plunge in container volumes and freight rates would lead to a drop in earnings this year. Full-year revenue increased by 32%, to $81.5 billion from […]
11 hours ago
Lindsay McDonald holds up a photo she took of an orb over central Montana that's believed to be a s...
Associated Press

US, states weigh farmland restrictions after Chinese balloon

HARLOWTON, Mont. (AP) — Near the banks of Montana’s Musselshell River, cattle rancher Michael Miller saw a large, white orb above the town of Harlowton last week, a day before U.S. officials revealed they were tracking a suspected Chinese spy balloon over the state. The balloon caused a stir in the 900-person town surrounded by […]
11 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.
...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
Germany sees unexpected growth in 3rd quarter; inflation up