According to preliminary figures from the Federal Statistical Office (Destatis), the price-adjusted gross domestic product (GDP) in Germany for 2022 was 1.9% higher than the previous year. Despite challenging conditions such as the ongoing Russia-Ukraine war, rising energy prices, supply shortages and the ongoing COVID-19 pandemic, the German economy still managed to perform well, according to Ruth Brand, president of Destatis.
The development of individual sectors varied considerably. While some sectors such as transport and hospitality, saw a rebound in activity after the lifting of most COVID-19 restrictions, other sectors, such as trade, experienced a decline in gross value added. The creative and entertainment industries saw particularly strong growth of 6.3%.
Despite the overall positive GDP growth, losses caused by the crisis should not be overlooked, according to Stefan Kooths, Vice President and Director of the Business Cycles and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel). He noted that without the energy price shock and persistent supply bottlenecks, economic output would have risen twice as strongly.
Looking ahead to 2023, IfW Kiel no longer expects a recession and predicts GDP to grow by 0.3%. While the ongoing pandemic and its economic consequences will continue to present challenges, the German economy has shown resilience in the face of adversity. Despite the difficulties, the GDP growth in 2022 serves as a positive indication for the future.
In conclusion, the German economy managed to perform well in the face of multiple challenges in 2022 and is expected to continue growing in 2023, despite the ongoing pandemic. However, the losses caused by the crisis should not be overlooked and the economy is expected to continue facing challenges. Nevertheless, the positive GDP growth in 2022 serves as a positive indication for the future.
