The German economy recorded an unexpected growth in the third chapter of the year, according to official data on Friday, but the slowdown in France and Spain exacerbated fears that the high rates of inflation and the energy crisis in the region will cause a recession.
The day after the Ukraine War, Russia reduced its gas supply, which causes expensive heating costs and exacerbates the dilemma of rising living costs for millions of people. At this time, Europe is prepared for a challenging winter.
Despite the dire predictions, Germany shocked analysts by revealing a 0.3% semester increase that was mostly supported by consumer spending.
In contrast, France and Spain saw growth of only 0.2% from July to September, a sharp drop from the 0.5% and 1.5% growth the two nations experienced in the previous chapter.
According to the preliminary data, the German Federal Statistics Federal Desties stated that “despite the ongoing Kofid-19 outbreak, supply chain disruption, rising costs, and war in Ukraine, the German economy has been able to persist.”
Analysts predicted that the biggest economy in Europe would contract by 0. 2% in the third chapter, but Germany managed to increase by 0. 1% in the second quarter of the year.
But economists warned that Friday data provides only a short rest period and that the economic decline is coming, at a time when the Russian war on Ukraine leads to high food and energy prices.
In this regard, preliminary statistics released on Friday by “Destatis” revealed that although the rate of rising consumer prices was slower than in prior months, the inflation rate in Germany increased in October to 10.4%.
Data revealed that while high energy prices were less acute, the expense of food and services was driving the height. 10% was the inflation rate in September.
The war increased inflation in the euro region, which in September hit a record high of 9.9%, depriving families of income and driving up prices for businesses.
Germany, whose energy -consuming industries were the key to its success as a source of exporting, which depends heavily on Russian gas before the war and was more affected by other European Union countries with the decline in Russian gas supplies.
In 2023, the German government projects a 0.4% economic contraction.
Strong commercial investments helped keep the momentum going in France, the second-largest economic force in the European Union, but analysts claim that the services sector’s growth has slowed since the closure restrictions were implemented.
As for Spain, the slowdown of growth was attributed to the decline in the performance of the real estate sector, as the activity has shrunk by 2. 5% and the decrease in exports and commercial investments..
Fears of stagnation in Europe amid Germany’s unexpected surge
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