The German economy is more resilient than expected

FrankfurtJan 23 – The German economy proved more resilient than expected as tensions in energy markets eased and supply chain bottlenecks slowly dissipated, the Bundesbank said in its monthly economic report on Monday.

Germany, which relies heavily on Russian gas, was expected to suffer a recession this year, a prospect that has hit hard on the 20-country eurozone as a whole.

“GDP growth is likely to have stalled somewhat in the fourth quarter of 2022, exceeding previous forecasts,” said the Bundesbank. “Recently released data has generally been better than expected in the December forecast.”

Market natural gas prices have more than halved since early December as consumption remained subdued by mild temperatures, and Europe managed to find more gas on the market than expected.

The Bundesbank added that government subsidies to ease the pain of rising energy costs for both households and businesses also helped boost confidence and consumption.

file data gross domestic product Eurozone first-quarter figures were released on January 31, and while official forecasts point to a small contraction, economists and policymakers have recently argued that the number could be positive, suggesting that while growth is weak, a recession can be avoided.