As of: February 14, 2024, 8:40 a.m
By: Amy Walker
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Press
Split
The gloomy economic outlook is not lost on the traffic light coalition.
According to an insider, the growth forecast for 2024 has now been lowered.
Berlin – According to insiders, the federal government is significantly reducing its forecast for the growth of the German economy this year.
The draft of the new annual economic report, which is to be published next week, only assumes an increase in gross domestic product (GDP) of 0.2 percent, as the
Reuters
news agency learned from government circles on Tuesday evening (February 13).
The government had previously expected 1.3 percent.
However, this forecast from October has no longer been considered realistic for a long time.
Economic slowdown hits Germany - stabilization in sight
When asked, a spokesman for the Federal Ministry of Economics said that the number could neither be confirmed nor denied.
The government will comment with the publication of the annual economic report.
In government circles it was said that there was no growth stimulus from the global economy and that there were numerous crises that were fueling uncertainty.
A lower forecast was also expected due to budget consolidation.
High inflation, rising interest rates and the weak global economy had already slowed down the German economy in 2023.
The gross domestic product shrank by 0.3 percent.
“Nevertheless, there is evidence of stabilization,” said a government representative.
“Despite the crisis, the labor market remains robust, inflation is noticeably weakening and energy prices are stabilizing.” In order to make this permanent, further measures to secure skilled workers, reduce bureaucracy and provide investment incentives for Germany as a location are necessary.
Robert Habeck takes part in a meeting of the Federal Cabinet in the Federal Chancellery.
© Kay Nietfeld/dpa
According to Finance Minister Christian Lindner (FDP), the traffic light government wants to present a concept to strengthen the location by spring.
This should probably be synchronized with the discussions about the draft budget for 2025, which is to be presented in the summer.
Lindner and Economics Minister Robert Habeck (Greens) recently described the location as no longer competitive.
Chancellor Scholz does not want to recognize a recession
People probably don't want to recognize the seriousness of the situation everywhere within the traffic lights.
Also on Tuesday, Chancellor Wolfgang Schmidt (SPD) claimed: “We don’t have a recession,” at the Association of Berlin Merchants and Industrialists (VBKI).
“We will see growth this year,” he added.
Chancellor Olaf Scholz (SPD) is also certain that the mood in the economy is worse than the actual situation.
In fact, the German economy has one foot in recession.
It shrank by 0.3 percent in the fourth quarter of 2023.
If there is another decline in the current first quarter, it will be referred to as a technical recession.
The Bundesbank expects “at best” stagnation from January to March.
(wal/Reuters)