German government announced absence of recession in 2023
2023.01.25 11:53
German government announced absence of recession in 2023
By Kristina Sobol
Budrigannews.com – According to the German government’s annual economic report, which was released on Wednesday, the country with the largest economy in Europe is now expected to narrowly avoid recession this year as inflation eases.
It stated that the fall forecast of a 0.4% decrease in gross domestic product was revised up to 0.2% growth this year.
After the initial shock of the energy crisis brought on by the war in Ukraine, inflation is expected to be 6% in 2023, down from the previous forecast of 7%. This is due to an improvement in energy prices.
According to the report, Economy Minister Robert Habeck stated
“There are no signs of a significant recession, which many observers have long considered inevitable.”
Habeck stated that the crisis brought on by the Russian invasion of Ukraine is now manageable, despite the fact that the energy crisis and interest rate hikes by central banks are making the German government cautious for this year.
He stated:
“Germany has demonstrated its resilience and has done extremely well economically.”
He went on to say that the initially extremely pessimistic scenario, in which a historic recession was feared in the event of a gas shortage, had been avoided.
He stated:
“Energy supplies remain secure and stable.” He stated, however, that the task at hand is to become even more energetically independent.
According to the report, German unemployment is anticipated to reach 5.4% in 2023, slightly higher than the 5.3% rate in 2022.
According to the Economy Ministry, “companies are also regaining confidence.”
The closely watched ifo business climate index continued to recover on Wednesday, fueled by expectations that were significantly less pessimistic.
The government also predicted that investment in machinery and equipment would rise by 3.3% in 2023, up from 2.5% growth in the previous year.
Headwinds persisted despite the improved outlook. According to the report, export growth is anticipated to slow to 2.2% this year from 3.2% last year.
It added that the war in Ukraine and its economic repercussions, the weaker global economy, persistently high energy and consumer prices, and the safety of gas supplies are among the most significant obstacles for the economy.
