Germany on track to avoid recession in 2023 despite energy crunch, government says
- Europe’s biggest economy is set to weather the fallout from Ukraine war better than expected and will eke out growth of 0.2 per cent this year
- The industrial powerhouse has ‘proved resilient … [and] consumers have done their part by making major energy savings’, economy ministry says
Germany is set to narrowly escape a recession this year, the government said on Wednesday, as Europe’s biggest economy weathers the fallout from Ukraine war better than expected.
Industrial powerhouse Germany is forecast to eke out growth of 0.2 per cent in 2023, the economy ministry said in its latest projections.
Back in October, when fears were running high about soaring energy costs in the wake of Russia’s war in Ukraine, Berlin was bracing for a contraction of 0.4 per cent in 2023.
“The government has fended off the economic crisis”, Chancellor Olaf Scholz told lawmakers in Berlin. “We have shown what we are capable of”.
Massive government intervention has helped keep the lid on energy costs for households and businesses after Russia cut deliveries of natural gas last year.
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As well as criss-crossing the globe to find alternative suppliers, the German government has unveiled a €200 billion (US$212 billion) support package to cushion the energy crisis, including a cap on electricity and gas prices.