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Robert Habeck presenting the report
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Michael Kappeler / dpa
Federal Minister of Economics Robert Habeck expects a lot of headwind this year as well.
Risks lurked everywhere, said the Green politician on Wednesday in Berlin at the presentation of the federal government's annual economic report: The situation remains volatile.
Habeck added that a severe economic crisis had been averted despite energy shortages and high inflation.
"We now assume that the recession will be shorter and milder, if it happens at all."
For 2023 as a whole, the federal government expects slight growth of 0.2 percent and will not shrink by 0.4 percent, as initially feared.
The situation will improve over the course of the year, said the head of the policy department for economic policy in the ministry, Elga Bartsch.
The brightening should begin in spring.
Inflation expected at 6.0 percent
According to government estimates, inflation will fall this year.
She is anticipating inflation of 6.0 percent.
In 2022, consumer prices had risen by 7.9 percent.
According to the annual economic report, the companies regained confidence: the mood has improved noticeably, companies are investing in modern systems and machines.
Investments in equipment are expected to increase by 3.3 percent according to government projections.
In 2022, the increase was 2.5 percent.
However, there is a reluctance to make certain investments, for example in the construction industry.
With regard to the important export economy, the report states that the global economy is expected to recover over the course of the year.
Exports can therefore grow by 2.2 percent and imports by 1.6 percent.
According to expectations, the labor market will continue to be »very stable«.
The government expects employment growth to continue, by 160,000 people.
In 2022, employment had already peaked at 45.7 million people.
The unemployment rate is expected to rise only slightly from 5.3 percent in 2022 to 5.4 percent in 2023.
The annual economic report is entitled "Renewing prosperity" and was approved by the Federal Cabinet this Wednesday.
It states that Germany "held its ground in the crisis" and also "proved strength" in the face of the Russian war of aggression in Ukraine and the associated energy crisis.
In 2022, the German economy had grown by 1.9 percent.
"In particular, consistent government action has made the crisis manageable," the report goes on to say.
In addition, the German economy has shown itself to be adaptable and resilient.
Consumers have also made their contribution by making large energy savings so that Germany can get through the winter well.
This year, to secure the energy supply, the focus is on the expansion of renewable energies.
The state will also invest "specifically" in the development of a green economy.
The government wants to encourage industry and medium-sized companies to invest, for example through improved tax depreciation regulations.
Unnecessary bureaucracy should be reduced.
"A key factor" for Germany as a business location is also the securing of skilled workers.
The government wants to increase immigration from abroad and “raise domestic potential”.
mamk/Reuters/AFP
