The federal government predicts that the country’s GDP will fall by 0.4% in 2023 and inflation will rise to 7%
Germany, the largest economy in the EU, is in recession. Federal Economy Minister, the green Robert Habeck, announced yesterday that the country’s GDP will contract in the third and fourth quarters of this year as well as in the first quarter of 2023. For that year, he expects a total contraction of the German economy by 0.4%, as reported at a press conference in Berlin. However, the chancellor was also convinced that the government support from the federal government will help most companies get through the winter. Habeck recalled that the deposits in which gas is stored are currently more than 95% full, so that Germany can get through the cold season without complications.
Presenting the economic forecasts of the executive led by Foreign Minister Olaf Scholz, Habeck did not hesitate to say that the country is going through “tough times” due to the consequences of the Russian invasion of Ukraine and the energy crisis that Europe affects above all. The projections show that the national economy will grow by only 1.2% this year and that, after falling from 0.4% in 2023, GDP will increase by 2.3% in 2024. The spring forecast was much more optimistic, proposing economic growth of 2.2% for this year and 2.5% in 2023.
The Executive also calculates that inflation will rise to 8% and next year to 7%.
“We are currently experiencing a severe energy crisis leading to an economic and social crisis,” acknowledged the environmentalist, blaming Vladimir Putin directly and accusing him of using oil and gas stocks as a weapon against the West. The pipelines carrying Siberian gas to Germany have been closed for weeks. Although Germany’s gas tanks are almost full, Habeck recalls that “gas is a scarce commodity and it should be consumed sparingly so that we can get through the winter without any problems.”
The energy crisis has also led to an explosive rise in prices, which in turn slows down industrial production. The loss of purchasing power of citizens in Germany has a clear impact on private consumption, which is expected to decline.
In order to cope with the energy crisis, the cabinet recently announced a rescue umbrella worth up to 200,000 million euros with which it will support companies and private households. These funds also subsidize the so-called «brake on gas prices», which subsidizes a large part of the consumption of this energy. The Ministry of Habeck emphasized that these subsidies will be applied as soon as possible. To this end, the State Secretaries of the Federal Chancellery and the Ministries of Economy and Finance are working hard to put into practice the proposals presented by a group of experts on Monday.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
