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BERLIN, Oct 28 (Reuters) – Germany staved off the threat of recession in the third quarter with unexpected growth, data showed on Friday, but indicators pointed to even higher inflation boosted by the painful shift from Russian energy to the largest economy in Europe.

Gross domestic product rose 0.3 percent from the previous quarter in seasonally adjusted terms, the federal statistics office said. A Reuters poll had forecast a 0.2% contraction.

“The German economy … continued to hold up despite difficult global economic conditions with the ongoing COVID pandemic, disrupted supply chains, rising prices and the war in Ukraine,” the office said in a statement.

Economic output in the third quarter was mainly driven by private consumer spending, he added.

In the previous quarter, the German economy grew slightly by 0.1% quarter-on-quarter.

Year-on-year, GDP rose 1.2% in the third quarter in seasonally adjusted terms, also beating analysts’ forecast of 0.8% growth.

“The German economy kept its head above water. Or to put it another way: there’s still life in the old dog,” said Thomas Gitzel, the bank’s economic vice president.

“However, the burdens for the coming quarters are immense,” he said, adding that the third-quarter data only postponed the arrival of a recession in Germany and the euro zone.

An energy standoff with Russia has sent energy prices spiraling, pushing inflation to its highest rate in more than 25 years in September to 10.9%, while fueling concerns of a possible gas shortage this winter, although gas storage facilities have been filled nearby. capacity

The October inflation rate will be announced later on Friday, and analysts expect no change.

However, inflation at the state level has been above this forecast.

In North Rhine-Westphalia, Germany’s most populous state, the consumer price index rose to 11% in October compared with 10.1% the previous month, the data

The wealthy southern state of Bavaria also posted 11% inflation in October.

The Ifo economic institute said the number of companies in Germany planning price increases fell slightly in October, citing the results of its survey, but warned that the full effect of inflation still it has not reached consumers.

Earlier this week, Ifo forecast that the German economy would contract by 0.6% in the fourth quarter.

In its latest forecast, the government forecast growth of 1.4% this year and a fall of 0.4% next year.

“The recession is now likely to hit in the winter, but it may not be as severe as initially feared,” said Jens-Oliver Niklasch of LBBW bank.

It reduced growth in the shock third quarter at the end of restrictions to mitigate the pandemic and relief measures introduced during the summer.

Reporting by Rachel More, Rene Wagner and Reinhard Becker Editing by Paul Carrel, Miranda Murray and Philippa Fletcher