Federal Economics Minister Robert Habeck sees a gradual recovery in the economy. The Green politician said in Berlin that he had hope that Germany was on the right track to work its way out of the crisis. The federal government slightly raised its economic forecast for this year.
She now expects gross domestic product to increase by 0.4 percent this year. In January, she had assumed 0.2 percent. The Economics Ministry expects stagnation in the first quarter. However, economic indicators such as industrial production, incoming orders and the business climate indicated an economic revival in the further course of the year, it said. According to forecasts, the economy is expected to grow by 1.6 percent in the coming year.
The spring projection forms the basis for the new tax estimate in May. Last year, the federal government also feared a recession this year as a result of the Ukraine war. However, there was no escalation of the energy price crisis.
The Federal Government’s support and stabilization measures to cushion the increased costs of companies and the loss of purchasing power in private households prevented a stronger slowdown in the winter half-year, the ministry announced. There was talk of a gradual recovery despite a difficult environment.
Habeck: “Inflation has peaked”
Inflation has also peaked. After a rate of 6.9 percent last year, the federal government is assuming 5.9 percent this year and 2.7 percent next year. “Inflation has peaked,” said Habeck.
Despite government support measures and rising incomes, according to the forecast, private consumption will initially be burdened by inflation-related losses in purchasing power. It will only gain momentum again later in the year as inflation continues to ease. The construction industry is a problem child. Habeck spoke of a clear problem. He referred to rising interest rates and declining construction investments.
Energy prices and shortage of skilled workers as brake pads
Managing Director Martin Wansleben said for the German Chamber of Industry and Commerce that the economy is standing still. “A broad upswing is not in sight.” The German economy has so far avoided a recession because companies got through the winter a little better than was feared in the autumn. “But we are still a long way from a sustainable recovery, as would have been expected after the Covid years.” Brake pads would have to be cleared out of the way. Wansleben mentioned the high energy prices and the shortage of skilled workers.
Habeck spoke of a dramatic shortage of specialists and workers. The planned law on the immigration of skilled workers will significantly strengthen the labor market. The coalition wants to facilitate the immigration of job seekers.
Industrial electricity price planned
The Economics Minister also said that the federal government wants to strengthen investment conditions in Germany – above all to strengthen companies in the transition to more climate-friendly production. An industrial electricity price should also serve this purpose. Due to the high energy prices in an international comparison, business associations see the risk that companies will move away or invest elsewhere.
Secretary of State for Economic Affairs Patrick Graichen announced a concept for an industrial electricity price for the coming week. Graichen said at an IG Metall event in Berlin that the aim was to make electricity available to industry as cheaply as possible and to bring it to industrial areas without grid fees or additional surcharges, fees or charges. This will cost the state money.
Habeck said energy prices were too high. He made it clear that there is a trend reversal – but it will take time for lower prices to reach companies and consumers on the markets. After a dip in the production of energy-intensive companies, things are looking up again there.
