Prices: Habeck expects inflation to continue falling

Prices: Habeck expects inflation to continue falling

Whether shopping, filling up the gas or renting: life in Germany has become more expensive than it has been for a long time. Minister Habeck, however, sees a glimmer of hope.

Federal Economics Minister Robert Habeck assumes that the currently high level of inflation will continue to fall. After 7.9 percent last year, an annual average of 6 percent is expected for 2023, said the Green politician in the Bundestag in Berlin.

He made a government statement on the annual economic report that he had presented the day before. According to forecasts, inflation will be curbed and the trend will be broken “in the year,” said Habeck. The energy price spiral must be broken, but core inflation must also fall.

Criticism from the Union faction

Representatives of the CDU/CSU parliamentary group accused Habeck of whitewashing. “Less bad is still bad,” said parliamentary group leader Jens Spahn. Simply speaking of a trend reversal in inflation is not enough. “Inflation is robbing the little man.” In general, the traffic light coalition of SPD, Greens and FDP is acting too hesitantly. A long phase of low growth is imminent.

AfD parliamentary group leader Leif-Erik Holm warned that Germany’s prosperity was in danger and that there was too much bureaucracy, for example with the supply chain law, which aims to improve working conditions in the production of imported products.

Left faction leader Amira Mohamed Ali summed it up: “Yes, Mr. Habeck, that was very nice poetry again, but unfortunately there was also a lot of whitewashing involved. The situation is much more serious than you make it out to be, and unfortunately you don’t have a sensible plan.” There was a risk of job losses and the end of companies.

The federal government has raised its economic forecast for this year and expects low economic growth. Gross domestic product (GDP) is expected to grow 0.2 percent, according to the annual economic report. However, contrary to what was expected in autumn, there will probably not be a decline in GDP on average for 2023.

Habeck: “The numbers are not good”

“The figures that we presented yesterday in the annual economic report are not good,” admitted Habeck, but they are better than long feared. This is “a great community effort of this country”. Germany paid a high price as a result of the Ukraine war, but this is nothing compared to what the people of Ukraine endured.

The next big challenge is the shortage of skilled workers, said Habeck. It is also necessary for more women to be able to work full-time and for people who have come to the country as migrants to be able to work here more easily. One-sided dependencies would have to be ended via new trade agreements. A stable and cheap energy supply should also be promoted, as should the fight against climate change.

Source: Stern

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