According to experts, the feared recession will not come this year
Despite the blows of the coronavirus epidemic, the war in Ukraine, supply chain problems and high energy prices, Germany’s Gross Domestic Product grew by 1.9% in 2022 on a year-on-year basis, as announced this Friday by the Federal Bureau of Statistics. The first economy of the European Union achieved a higher GDP than what specialized institutes and banking economists calculated. In 2021, Germany’s economic growth will be 2.6%. The feared recession for 2023 will be less than 1%, according to expert estimates, and much milder than initially expected. Some institutes even expect a small growth for this year thanks to millions of dollars in support from the federal government for companies and individuals to cope with the high energy prices.
However, as a result, Germany’s deficit will increase again in 2023, after the state, the 16 federal states, the municipalities and the social security have spent more money than they receive in 2022. The Ministry of Finance recently stressed that the various crises last year forced it to take on a new debt of 115,400 million euros, 23,500 million less than initially calculated, mainly thanks to the significant increase in tax revenues. This debt does not include the extraordinary expenditure that the executive has taken on with the additional budget of EUR 100,000 million to modernize the Bundeswehr, the federal army, or the up to EUR 200,000 million to curb energy prices in this country, of which up to 30,000 million spent so far.
Despite everything and after two years of the pandemic, the German government deficit will not exceed the debt rules for EU member states at 2%. The European Stability and Growth Pact allows member states to achieve a budget deficit of up to 3% and a total debt of up to 60% of nominal GDP, although these standards have shifted temporarily due to costly aid programs due to the coronavirus epidemic suspended. The agreement within the EU envisages that they will be active again on a regular basis from 2024.
Source: La Verdad
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