German economy stronger than expected in third quarter

Germany's economy was originally expected to grow 0.3% in the third quarter, but thanks to solid consumer spending, growth was 0.4%, showing a better-than-expected performance.

Data released on Friday shows that household consumer spending rose 1% in the third quarter compared to the second. Thus, it can be concluded that this is one of the main reasons for economic growth.

According to the statistics office, Germany's economy remains resilient. For example, consumers have found ways to travel more, despite ever-rising prices and an ever-deepening energy crisis.

On the one hand, it’s too early to rejoice at the growth news. Households and companies are already experiencing some difficulties due to rising energy prices. For this reason, Europe's economy is expected to survive the recession.

On the other hand, the statement of the Bundesbank is reassuring. It says that no definite conclusions should be drawn, as the extent of the crisis hasn’t yet been determined. Moreover, due to the rather warm autumn, the natural gas from the storage facilities was used much less than expected. Thus, the risk of storage has significantly decreased.

The country is currently experiencing the highest inflation in decades. The government, led by Olaf Scholz, is preparing measures to subsidize electricity and gas to help cope with the effects of inflation.