Economic forecast
German economy will probably stagnate this year
After five years of crisis, there is no recovery in sight for the German economy – on the contrary. This is bad news, especially for employees and people looking for a job.
The Federal Government has reduced its forecast of economic development. In the spring process presented on Thursday, the Federal Ministry of Economics is now assuming stagnation in 2025. In January, growth was still expected by 0.3 percent – that was already a clear correction down from the previously forecast 1.1 percent.
“German economic policy faces major challenges,” said outgoing Federal Minister of Economics Robert Habeck (Greens). After several years of crisis, characterized by Corona pandemic and Russia’s attack on Ukraine, the “unpredictable trade policy of the United States” now ensure additional uncertainty.
Habeck expects more unemployed
In the spring process, Habeck’s ministry is increasingly reluctant to invest in private investments. On the labor market, the cloudy economic outlook will also be more noticeable. “Employment should decrease this year,” said the ministry. “Unemployment should also increase.”
The forecast emphasizes the “decline in domestic uncertainties” due to the expected new federal government as well as increased real income. This should boost private consumption. The Ministry of “Positive Pulses” also hopes for the new government’s investments already stated.
However, this should not contribute to the growth noticeably until the coming year. According to the current forecast, the German economy could then grow by 1.0 percent.
AFP
CL
Source: Stern
