Germany doesn’t expect strong economic downturn in 2023
2023.01.17 12:44
Germany doesn’t expect strong economic downturn in 2023
By Kristina Sobol
Budrigannews.com – Germany’s BDI industry association stated on Tuesday that mild recessionary trends are anticipated to predominate at the beginning of the year, but things should start to improve in the spring.
The German economy is expected to contract by 0.3 percent this year, and the energy crisis triggered by Russia’s invasion of Ukraine will continue to weigh on industry in Europe’s largest economy.
The German statistics office reported on Friday that German economic output stagnated in the final quarter of 2022 and increased by 1.9% throughout the year, adding to indications that the nation may avoid a recession.
Russwurm went on to say that the BDI predicts that exports of goods and services will rise by 1% in real terms this year, falling behind global trade, which is expected to rise by 5%.
According to the president of the BDI, Germany is trailing behind other nations with lower energy costs.
He stated, “The cost factor of energy has for a long time not only weakened companies that use a lot of energy, but it has also had a noticeable impact on the entire value chains of industry.”
Production relocations were not out of the question.
Russwurm argued that Germany should improve its business and regulatory environments to make it more appealing to investors. “For the future of Germany as an industrial, export, and innovation country,” Russwurm stated, “2023 must become a year of decisions.”
Additionally, the industry association proposed lowering the company tax burden to 25%, which is the international average.
Although he cautioned that “resilience isn’t free,” Russwurm stated that Germany should diversify its trade partners to increase resilience.
Russwurm stated that trade policy for the European Union should be proactive. He asserted that Washington’s confrontation should be avoided and that an intelligent industrial policy was required as a response to the U.S. Inflation Reduction Act.
