Economists adjust economic forecasts
How can the German economy get out of its slump? The Council of Economic Experts want to answer this question today in Berlin.
The experts from the German Council of Economic Experts are publishing their new economic forecast for the current and coming year. In their annual report, they discuss the current economic situation against the backdrop of high inflation, energy prices and interest rates. They also give the German government advice for a growth-oriented economic policy.
Deteriorating prospects for companies
In spring, the economic experts predicted that Germany would narrowly avoid a recession. However, a sustainable upturn was not in sight either. In the meantime, however, the outlook for companies has deteriorated once again. Both the German government and the leading economic research institutes expect the economy to shrink this year. They have recently lowered their forecasts compared to the spring estimates, in some cases significantly.
Germany is emerging from the crisis more slowly than expected, said Economics Minister Robert Habeck. However, he believes that the bottom has been reached. In 2024, the economy is expected to grow by at least 1.3 percent again, according to the consensus expectation of the federal government and the institutes.
Optimism and concerns
There are several reasons for the economic difficulties: the aftermath of the energy price crisis, the measures taken by the European Central Bank to combat inflation and a weak global economy. Overall, geopolitical conflicts are having a negative impact on the situation for companies - which is particularly noticeable in Germany as an export nation.
The experts are optimistic about the development of wages, lower energy prices and returning purchasing power. An easing of the inflation rate is also foreseeable.
However, structural problems such as excessive bureaucracy and slow approval procedures for the expansion of renewable energies from wind and solar power are causing concern. The federal and state governments are now promising improvement here: a package of measures agreed on Monday evening should ensure that planning and approvals are completed more quickly.
The Federal Government, led by Robert Habeck, is considering the Council of Economic Experts' advice for a growth-oriented economic policy, as inflation, energy prices, and interest rates impact the current economic situation. Despite Germany's slow recovery from the crisis, Habeck remains hopeful that the economy will grow by at least 1.3% in 2024. However, the experts express concerns over structural issues, such as bureaucracy and slow approvals for renewable energy expansion, which could hamper Germany's potential economic growth in the energy sector.
Source: www.dpa.com
