BERLIN, (Reuters) – The German economy grew slightly during the first quarter this year due to stronger investments, however, the Federal Statistics Office reported Friday that Ukraine’s war began having an increasingly negative impact on the German economy.

The office reported that Europe’s biggest economy increased by 0.2% in the third quarter adjusted for inflation. However, net exports have slowed down growth. A Reuters poll showed 0.1% growth.

According to the statement, “The short-term economic developments since February have been affected by the growing economic impact of the conflict in Ukraine.”

On Wednesday, the German government cut its 2022 growth projection to 2.2%. This is down from 3.6% in January. The reason for this was Russia’s invasion and sanctions against Ukraine. The government also increased its 2022 inflation projection to 6.1%.

Robert Habeck, Economy Minister, stated that the decreased growth projection did not include a Russian blockade or energy embargo and that the economy could fall into recession should either one of these occur.

Later Friday, the first-quarter GDP figures of the euro zone (where Germany has the highest number of 19 economies) are expected to be available.

Joerg Kraemer from Commerzbank (ETR) stated that companies and consumers are uneasy. “If Russian gas supplies were stopped, this would most likely lead to a severe recession. At the moment, economic risks are high.

On Wednesday, a survey showed that German consumers expect to plummet to historic levels in May. The war in Ukraine has led to high costs for families and dashed hopes of recovery from the pandemic.

German chemicals company BASF has reaffirmed Friday’s 2022 profit prediction, while passing on the soaring raw material prices to its industrial customers. But, it warned that global economic conditions are uncertain.

According to the company, “The market environment is still dominated by an extremely high level of uncertainty.”