(Original title: Germany escapes recession unexpectedly, president invites people to prepare for difficult years)
Financial Associated Press, October 29 (publisher Niu Zhanlin)On Friday (October 28) local time, data released by the German Federal Statistical Office showed that Germany’s gross domestic product (GDP) grew 0.3% in the third quarter compared to the previous month, unexpectedly avoiding a recession. Economists had largely predicted that German GDP in the third quarter would shrink by 0.2% from the previous quarter.
Compared to other EU countries, Germany’s inflation rate could exceed 10.4% in October, the German Federal Statistical Office said. The Bureau of Statistics will release the details and final figures on November 11th.
Since the Russian-Ukrainian conflict, energy prices in Germany have risen significantly and have had a significant impact on inflation rates. In October, energy prices in Germany increased by 43.0% year-on-year.
German economic institute IFO warned that the full impact of inflation has not yet reached consumers, although its survey showed a slight decrease in the number of German companies intending to raise prices in October.
German inflation is likely to remain double-digit for some time, economists said, putting pressure on the European Central Bank to keep raising interest rates. The European Central Bank raised interest rates by 75 basis points for the second consecutive time on Thursday, but signaled growing concerns about economic growth.
European Central Bank President Christine Lagarde said the ECB could raise interest rates further at future meetings, but was also cautious about the deteriorating growth outlook for the euro zone economy. Leaders in France and Italy have both warned recently that the European Central Bank’s interest rate hike could hurt the eurozone economy.
Thomas Theobald, an analyst at the German Institute for Macroeconomics and the Economic Situation (IMK), said: “It is unclear whether inflation has peaked, but the recent drop in natural gas prices has given some hope.”
The main factors driving down the German economy include high energy prices, lower household purchasing power caused by high inflation, the unstable situation of world trade and the restrictive monetary policy of central banks.
The analysis showed that the German economy is only temporarily out of recession, but due to factors such as energy shortages, the German economy is still in troubled waters.
On the same day, German President Frank-Walter Steinmeier gave a 45-minute speech to the German people via live TV. He invited the German people to prepare for more difficult years.
Steinmeier said: “The days to come will be even more difficult, even after this winter it will be difficult to return to the previous state”, but Germany “has the capacity to overcome the crisis”, he also stressed the need to strengthen cooperation. Furthermore, he mentioned issues such as climate change and the food crisis.
