What's going on?

Reports out on Wednesday suggested Germany might just have dodged a recession.

What does this mean?

When Russia first invaded Ukraine, Germany seemed all but destined for a recession � you know, those pesky back-to-back quarters of negative growth. So after the economy shrank 0.4% at the end of last year, the first quarter of 2023 was always going to be pivotal. The verdict: if Germany�s top forecasters are worth their weight in bratwurst, the country may actually have sidestepped a recession, with the economy growing an estimated 0.1% last quarter. That would mean the country�s managed to weather the energy crisis, reducing its reliance on Russian natural gas and softening the impact of higher energy prices on households. No wonder the economy�s looking up, then: instead of a 0.4% drop this year, economists now see 0.3% growth in the cards for Germany.

Why should I care?

Zooming in: Lucky streak.
That wasn�t the only bit of good news Germany got this week. Factory orders rose by 4.8% in February, crushing expectations of a measly 0.3% increase � a good sign given how crucial manufacturing is to the nation. And German exports outstripped expectations too, with a 4% uptick in February � while business confidence climbed for the fifth consecutive month in March. And sure, enduring demand might slow down inflation’s retreat, but for now, that’s a small price to pay to fend off a recession.

The bigger picture: It�s a win-win-win.
It isn’t just a win for Germans if their economy is getting back on track: it’s a victory for the entire world. See, the country is Europe’s biggest economy, and its success could help stave off a recession for the whole bloc. And as a major investor in other nations, a thriving Germany bodes well for foreign investment and trade to boot. And that�s not to mention that Germans� famous gift for tech innovation � especially in engineering � could help drive progress in key sectors worldwide.