The German economic data for the first quarter of 2023 has exceeded expectations. Despite the risk of a energy crisis this winter, the EU’s largest economy has pulled through and recovered significantly.
According to a report by the Deutsche Bundesbank, the German economy has posted a slight but stable increase. Most earlier forecasts suggested it would decline instead. The best-performing economic sector was manufacturing, which recovered quickly thanks to rising production orders. This suggests that demand for industrial goods has bottomed out. Furthermore, the German economy took advantage of lower gas prices, which supported energy-intensive industries after the natural gas shock of the autumn of 2022. Construction and car manufacturing sectors have also gone up. While this might not be a very strong recovery, it is much better than a 0.4% decline reported in Q4 2022.
In addition, lower natural gas prices have pushed inflation down, Destatis reported. The flash manufacturing and services PMI from S&P Global has also increased to its highest level in 10 months, exceeding the expectations of analysts.
