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Annual economic report: Federal government lowers growth forecast significantly

2022-01-21T14:14:27.204Z

The economic recovery after the pandemic is significantly less than the government had hoped. According to SPIEGEL information, the Ministry of Economics cuts the forecast to 3.6 percent.



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Container Terminal Tollerort in Hamburg

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The economy in Germany is unlikely to develop as strongly as previously thought.

This year, gross domestic product is only expected to grow by 3.6 percent.

According to SPIEGEL information, this is in the federal government's annual economic report, which will be presented next week by Federal Minister of Economics Robert Habeck (Greens).

In the autumn forecast, the federal government had forecast growth of 4.1 percent.

Ministry circles say that the dynamics in the German economy are "robust". The catch-up effect after the corona pandemic continues, but is significantly slowed down. The reason given by the ministry is the supply bottlenecks on the world markets, for example for computer chips. The German auto industry suffered from this in the past year, and the shortage is likely to continue this year. According to the Ministry of Habeck, the ongoing fourth wave of the corona pandemic is also having a negative effect.

Habeck will answer questions from parliamentarians on the annual economic report in the Bundestag on Wednesday. In addition to the economic forecast, the report also includes sustainability, climate neutrality and resource conservation in the market economy. "Our goal must be to separate prosperity from resource consumption and climate-damaging economic practices," Habeck told SPIEGEL.

Growth and increases in productivity are still necessary for a society. These standards alone do not adequately capture the state of an economy, Habeck told SPIEGEL: "That's why we considered criteria such as education, distributive justice and environmental destruction for the first time." The government must also answer the question of where we generate value and at what price, said the Economics Minister who wants to establish a socio-ecological market economy in Germany.

You need courage and the freedom to make the best of it.

»In order to make maximum use of this, we want to realign the relationship between the state and companies in line with the ecological challenge so that we can use the right incentives to fully exploit entrepreneurial potential and bring about the next technological revolution.«

Source: spiegel

All business articles on 2022-01-21

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