This growth was driven by increased domestic demand following the lifting of COVID-19 restrictions.
Economic Growth Despite Challenges
The German Economy, the largest in Europe and the fourth-largest in the world, was able to maintain growth in every quarter of 2022, despite concerns that Russia's reduction of gas flows could negatively impact the Economy.
Government Action Contributes to Strong GDP Growth
According to preliminary figures, Germany's GDP grew by 1.9% in 2022, driven by a strong uptick in private consumption of 4.6% relative to 2021.
This growth outperformed earlier predictions and can be attributed to government action, such as legislative packages and support for the Economy.
Inflation Avoided, 2023 Prospects Less Upbeat
Aside from strong GDP growth, Germany avoided double-digit inflation in 2022, dropping to 8.6% in December. However, the government predicts that inflation will stagnate in 2023. Additionally, a global industrial production slowdown and a drop in global trade may impact Germany's export-oriented Economy in 2023.