Germany dodges recession but inflation rises sharply [Video]

Germany dodged a technical recession after posting surprise growth in the third quarter, official data showed Wednesday, but the rare good news for Europe’s largest economy was tempered by a sharp uptick in inflation.

German gross domestic product expanded 0.2 percent quarter-on-quarter, federal statistics office Destatis said in preliminary data, thanks to higher government spending and household consumption.

The figure defied expectations, and the government of Chancellor Olaf Scholz had braced for another slight drop in GDP after output already fell in the second quarter.

Economy Minister Robert Habeck said the quarter-on-quarter expansion was a “ray of hope” for the German economy, which has been battered in recent years by high energy costs, cooling exports and increased Chinese competition.

“The economy is proving more robust than previously forecast and the technical recession expected by many has not materialised,” Habeck was quoted as saying by German media.

A technical recession is …