# German economy expected to skirt recession – economy ministry report Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-14 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: German economy to narrowly skirt recession - ministry report Meta Description: Germany is set to narrowly avoid recession with modest growth in Q1. Industrial and construction output driving growth, eased material bottlenecks and falling URL: https://financedigest.com/german-economy-expected-to-skirt-recession-economy-ministry-reporthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-14t084040z1lynxmpej3d08mrtroptp4christmas-season-germany-shopping-1736814148245-compressed.jpg) # German economy expected to skirt recession – economy ministry report BERLIN (Reuters) -Germany is expected to narrowly escape recession and post modest growth in the first quarter of the year, according to an economy ministry report published on Friday. “A technical recession of two negative quarters in a row appears to have been averted,” the ministry said. Current forecasts predict a slight year-on-year increase in gross domestic product (GDP) for 2023 as a whole, it added. Leading economic institutes [expect the German](https://www.financedigest.com/german-industrial-orders-rise-more-than-expected-in-february.html "German industrial orders rise more than expected in February") economy to grow 0.3% this year. Economic indicators point to a noticeable pickup in the first quarter, with industrial and construction output driving growth, benefiting from an easing of material bottlenecks, [falling energy prices](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett ") and favourable weather conditions, the report said. The institute’s Joint Economic [Forecasts anticipate a 0.1% expansion in GDP](https://www.financedigest.com/german-govt-to-slightly-raise-2023-gdp-forecast-sources.html "German govt to slightly raise 2023 GDP forecast – sources") in the first quarter. This follows a [0.4% contraction in the fourth quarter](https://www.financedigest.com/german-gdp-contracted-by-0-4-in-the-fourth-quarter.html "German GDP contracted by 0.4% in the fourth quarter") of 2022. The ministry spoke of a “favourable start” to the year. The mild [winter and high gas storage levels had contributed to sufficient gas availability in Germany and Europe](https://www.financedigest.com/europe-experienced-second-warmest-winter-on-record.html "Europe experienced second-warmest winter on record"), which was reflected in a noticeable drop in energy prices, the ministry said. Consumer sentiment is expected to continue its recovery in the coming months, although inflation-related [losses in purchasing power continue to weigh on the economy,” the report](https://www.financedigest.com/global-economy-weathered-98bn-natural-hazard-loss-in-first-half-of-2016-according-to-aon-catastrophe-report.html "GLOBAL ECONOMY WEATHERED BN NATURAL HAZARD LOSS IN FIRST HALF OF 2016, ACCORDING TO AON CATASTROPHE REPORT") said. [Inflation rates](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc") are expected to continue to ease in the coming months, although remaining at a high level. The current [forecast range is 5.4% to 6.6% for inflation](https://www.financedigest.com/boes-saunders-worries-inflation-will-be-higher-than-forecasts.html "BoE’s Saunders worries inflation will be higher than forecasts") in 2023 and 2.1% to 3.5% for 2024. The economy ministry [sees risks to its economic outlook](https://www.financedigest.com/britains-next-sees-lower-profit-in-2023-as-consumer-outlook-darkens.html "Britain’s Next sees lower profit in 2023 as consumer outlook darkens"), such as weak private consumption, a deterioration of conditions in construction, recent problems in financial institutions and geopolitical uncertainty due to the war in Ukraine. (Reporting by Maria Martinez and Reinhard Becker Editing by Miranda Murray and Christina Fincher) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---