💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

German economy grew slightly in Q1, but Ukraine impact growing

Published 04/29/2022, 04:36 AM
Updated 04/29/2022, 04:41 AM
© Reuters. FILE PHOTO: People with protective face masks walk at Kurfurstendamm shopping boulevard, amid the coronavirus disease (COVID-19) outbreak in Berlin, Germany, December 5, 2020.    REUTERS/Fabrizio Bensch
CBKG
-

BERLIN (Reuters) -The German economy grew slightly in the first quarter of this year, supported by stronger investment, but the war in Ukraine began having an increasing impact from the end of February, the Federal Statistics Office said on Friday.

Europe's largest economy grew by 0.2% on the quarter in adjusted terms, the office said, adding that net exports had slowed growth. A Reuters poll had pointed to growth of 0.1%.

"The economic consequences of the war in Ukraine have had a growing impact on the short-term economic development since late February," the office added in a statement.

The German government on Wednesday cut its growth forecast for 2022 to 2.2% from 3.6% projected in January as Russia's invasion of Ukraine, sanctions and high energy prices take a toll on output. It also raised its 2022 inflation forecast to 6.1%.

Economy Minister Robert Habeck said the reduced growth forecast did not assume a Russian energy embargo or blockade and that the economy would tip into recession if either of those transpired.

First-quarter GDP figures for the wider euro zone, where Germany's is the biggest of 19 economies, are due later on Friday.

Commerzbank (ETR:CBKG) economist Joerg Kraemer said companies and consumers were unsettled: "If Russian gas supplies were halted, the energy crisis triggered by this would probably cause a deep recession. The economic risks are very high at the moment."

A survey released on Wednesday showed German consumer morale is projected to plunge to a historic low in May as the war in Ukraine leads to soaring costs for households and dashes hopes of a post-pandemic recovery.

© Reuters. FILE PHOTO: People with protective face masks walk at Kurfurstendamm shopping boulevard, amid the coronavirus disease (COVID-19) outbreak in Berlin, Germany, December 5, 2020.    REUTERS/Fabrizio Bensch

German chemicals group BASF reaffirmed its 2022 profit forecast on Friday, as its passes along soaring raw materials costs to its industrial customers, but warned that conditions globally were uncertain.

"The market environment continues to be dominated by an exceptionally high level of uncertainty," the company said.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.