Germany’s economy expects gross domestic product to grow by 0.2% in 2023. Economy Minister Robert Habeck will present the annual economic report in Berlin on Wednesday.
Germany is unlikely to slip into a recession this year as feared – the German government wants to raise its economic forecast slightly. He expects gross domestic product (GDP) to grow by 0.2% in 2023, as confirmed in advance in government circles. German Economy Minister Robert Habeck (Greens) will present the annual economic report in Berlin on Wednesday.
In mid-October, the German government significantly reduced its economic forecasts, mainly because of the energy price crisis. At the time, she expected the economy to shrink by 0.4% in 2023.
As early as mid-December, however, circles in Germany’s Ministry of Economic Affairs had said that economic development would be better. The government’s bailout packages and the multi-billion dollar “defence umbrella” and associated gas and electricity price curbs played a major role in this.
According to provisional data from the Federal Statistical Office, Europe’s largest economy grew by 1.9% last year. Gloomy forecasts in view of the war in Ukraine, record inflation and the energy price shock did not materialize. For 2023, many institutes predicted that economic output would decline.
The labor market remains a key challenge
The German government sees the growing shortage of workers and skilled workers as a key economic policy challenge. According to a draft annual economic report, the growing shortage of personnel in elementary areas such as health, care and education is already having far-reaching consequences for the current and future quality of life of people in Germany. The shortage of workers also complicates the realization of future investments, also in the area of climate protection. The federal government wants to take defensive measures and, among other things, facilitate the immigration of foreign skilled workers.
Business associations increasingly see the global competitiveness of German companies at risk, as they recently made clear, referring to the high tax burden and high energy prices in international comparison.
In order to promote investments in climate protection and digitization, the federal government is preparing to introduce an investment premium, as stated in the draft. Habeck had said that 2023 was all about industrial policy. The aim is to expand site security and drive the fundamental shift towards a digital and climate-neutral economy.
(APA)