Things are looking anything but rosy for the economy: the federal government and leading researchers have recently significantly lowered their expectations. How do economists see this?
How does the German economy get out of its slump? The economists in Berlin want to answer this question today.
The experts of the Advisory Council publish their new economic forecast for the current and next year. In their annual report, they discuss the current economic situation against the backdrop of high inflation, energy prices and interest rates. They also give the federal government advice on growth-oriented economic policy.
Prospects for companies worsened
In the spring, economists predicted that Germany would narrowly avoid a recession. However, a sustainable upswing is not in sight either. In the meantime, however, the prospects for companies have worsened again. Both the federal government and the leading economic research institutes expect the economy to shrink this year. They recently lowered their forecasts significantly compared to the spring estimate.
Germany is emerging from the crisis more slowly than expected, said Economics Minister Robert Habeck. But he sees a bottom being reached. According to the consensus of the federal government and the institutes, the economy should grow again by at least 1.3 percent in 2024.
Optimism and worries
The economic difficulties have several reasons: the aftermath of the energy price crisis, the European Central Bank’s measures to combat inflation and a weak global economy. Overall, geopolitical sources of conflict are putting a strain on the situation of companies – which Germany, as an export nation, is particularly feeling.
The experts are optimistic about the development of wages, lower energy prices and a return in purchasing power. An easing in the inflation rate is also foreseeable.
On the other hand, structural problems such as excessive bureaucracy and slow approval processes in the expansion of renewable energies from wind and sun are a cause for concern. The federal and state governments are now promising improvement here: a package of measures concluded on Monday evening is intended to ensure that planning and approvals proceed more quickly.