Germany's GDP Defies Recession Worries with Unexpected Growth

Germany's GDP grew by 0.2% in the third quarter, driven by government and household spending, defying expectations of a 0.1% contraction. Despite this growth, challenges such as high energy costs and increasing unemployment persist. Inflation is also rising, with the national rate predicted to reach 2.1% in October.

Germany's economy achieved an unexpected growth of 0.2% in the third quarter, primarily due to increased government and household spending, according to preliminary data from the statistics office released Wednesday. This comes amidst fears of a recession in Europe's largest economy.

Economists had predicted a 0.1% contraction for the quarter, highlighting resilience in consumer spending. Despite the positive GDP figures, challenges remain, as high energy costs and sluggish demand for exports continue to weigh on the economy.

Moreover, the labour market showed signs of stress, with unemployment figures climbing by 27,000 in October, surpassing expectations. Inflation has also seen an uptick, with key states reporting higher rates, suggesting potential national increases.

(With inputs from agencies.)