Despite the consequences of the Ukraine war, the German economy surprisingly stayed on course for growth in the spring.

Between April and June, the gross domestic product (GDP) increased by 0.1 percent compared to the previous quarter, as the Federal Statistical Office (Destatis) announced on Thursday and thus revised a flash estimate.

Initially there was talk of stagnation in economic output.

At the beginning of the year there was an increase of 0.8 percent.

"Despite the difficult global economic conditions, the German economy held its ground in the first two quarters of 2022," said Destatis President Georg Thiel.

Compared with the fourth quarter of 2019, i.e. the quarter before the start of the corona pandemic, it shows that GDP in Germany reached the pre-crisis level for the first time in the spring.

According to the office, the economy was mainly supported in the spring by private and government consumer spending.

And trade with foreign countries increased overall.

Although significantly fewer goods were exported to Russia in the second quarter than at the beginning of the year due to the impact of the war in Ukraine, companies reported stable exports overall: Despite the disrupted global supply chains, 0,

3 percent more goods and services exported than in the first quarter.

However, imports increased more sharply by 1.6 percent compared to the previous quarter.

The Bundesbank expects that economic output will “roughly stand still” in the summer and that there could be a recession in the winter half-year as a result of the gas crisis.

The Russian war against Ukraine, which has been going on for six months, will also burden the German economy for years to come, as DIW President Marcel Fratzscher recently said in a Reuters interview.

Meanwhile, the German government deficit fell sharply in the first half of the year.

By the end of June, the federal government, states, local authorities and social insurance together spent 13.0 billion euros more than they earned.

The deficit corresponds to 0.7 percent of the gross domestic product.

In the first half of 2021, the deficit was still 75.6 billion euros, which corresponded to a deficit ratio of 4.3 percent.

While the federal government reported a minus of 42.8 billion euros, both the federal states (+16.6 billion euros), the municipalities (+5.7 billion euros) and the social security funds (+7.4 billion euros) wrote black this time Counting.

Tax revenues increase significantly

Tax revenue increased by 11.6 percent in the first half of the year, significantly exceeding the level before the Corona crisis in the first half of 2019. "Corporate taxes played a large part in this," according to the statisticians.

Revenues from trade tax (+27.7 percent), assessed income tax (+24.8 percent) and corporation tax (+19.4 percent) recorded strong growth.

In addition, revenue from sales tax and import sales tax increased (+15.5 percent) under the influence of inflation.

At the same time, spending increased only slightly as subsidies fell by 50.1 percent.

“The reason for this was in particular the expiry of various corona measures,” it said.

The Bundesbank also expects a deficit for the year as a whole, but this should be lower than in 2021 at 3.7 percent.

“The reason is the fading fiscal burdens caused by the corona crisis,” says the current monthly report of the German central bank.

This was reflected in the first half of the year in sharply rising tax revenues and falling pandemic spending.

"As things stand at present, new burdens from the Ukraine war and measures to compensate for high prices will not offset this recovery," said the Bundesbank.