Germany is expected to narrowly avoid a recession this year, the government said this week, as Europe’s biggest economy withstands the aftershock of the Ukraine war better than prior projections had estimated.

The country is forecast to obtain economic growth of 0.2% in 2023, the economy ministry shared in its latest projections. In October, Berlin was preparing for a contraction of 0.4% amid soaring energy costs and a cost-of-living crisis.

However, massive government intervention aided in keeping energy costs for households down after Russia reduced deliveries of natural gas last year. The German government recently unveiled a €200bn support package to soften the blow from the energy crisis, including a cap on electricity and gas prices.

Germany’s Chancellor Olaf Scholz has also sought energy alternatives in Canada and announced an energy security deal with the UAE. The expected downturn was also positively impacted by a mild winter and falling wholesale gas prices.

“The German economy as a whole has proved resilient,” the ministry said in an annual report. “Consumers have also done their part by making major energy savings.”