German business does not expect strong economic downturn
2022.12.27 03:21
German business does not expect strong economic downturn
Budrigannews.com – According to a survey conducted by major associations and published by Reuters on Tuesday, German businesses anticipate only a mild recession in the coming year in spite of obstacles posed by the energy crisis, shortages of raw materials, and a weak global economy.
Siegfried Russwurm, president of the Federation of German Industries (BDI), stated, “A decline in economic activity is likely to be accompanied by the last quarter of 2022 and the start of 2023.” Notwithstanding, we anticipate just a slight rut.”
There are more and more indications that the German economy may be able to avert the worst of an economic downturn brought on by a drop in Russia’s energy supply following the invasion of Ukraine.
As energy costs fell, inflation fell to 11.3% in November from 11.6% the month before. The German government has forecast that the economy will expand by 1.4% this year and shrink by 0.4 percent the following year.
Russwurm warned that Germany’s export-dependent economy would continue to experience subdued growth until 2024 due to weak global demand.
According to the German Association of Chambers of Commerce and Industry (DIHK), there are numerous signs that supply chain disruptions are decreasing.
According to DIHK President Peter Adrian, “Freight rates for container prices are approaching long-term normal values again, and the congestion outside international ports is slowly easing.”
“In the event that the reported relaxations of China’s zero-Coronavirus strategy are executed, it would likewise be a positive sign for worldwide stockpile chains,” he added.
However, the DIHK cautioned that the outlook for 2023 remained clouded by rising energy costs and declining consumer sentiment.
The DIHK was echoed by the ZDH craftsmen’s association, which reported significantly fewer orders for the upcoming year.
According to ZDH Secretary General Holger Schwannecke, “The order backlog will still carry us until the beginning of spring, but there are many question marks for the time after that.”
More China’s industry has suffered greatly due to COVID
According to the German Wholesale, Foreign Trade, and Services Association (BGA), the situation remained robust in numerous economic sectors. However, “we are carrying over negative expectations from month to month, the depth and breadth of which have not yet been realized,” stated Dirk Jandura, president of the BGA.
He said he was certain that organizations would go onto a really reassuring way again over the span of the spring.
