Finance Associated Press, February 22 (edited by Niu Zhanlin).On Wednesday local time, Germany** lowered its economic growth forecast for this year to 02%, well below last fall** of 1At 3%, weak global demand, geopolitical uncertainty and persistently high inflation have dampened hopes for a rapid** economy.
In fact, Europe's largest economy had its GDP shrink by 03%, making it the worst-performing major economy in the world. The market expects that the German economy "may decline slightly again" in the first quarter of this year, falling into a technical recession. A technical recession is a financial industry term that usually refers to two consecutive quarters of decline in real GDP.
This week, the Bundesbank also released a pessimistic monthly report, saying that the German economy has not yet recovered and that output in the first quarter of 2024 may fall slightly again. With economic output falling for the second time in a row, the German economy will fall into a technical recession.
German Economy Minister Robert Habeck said in a statement on Wednesday that geopolitical tensions and high interest rates are weighing on the economic recovery, though real wages and a strong labor market should help over the course of 2024.
Recent data showed that the number of businesses filing for standard bankruptcy proceedings in Germany increased by 26 percent year-on-year in January2%, corporate investment declined, and German real estate developers cancelled new projects.
Habeck added that the economic situation is very challenging and more must be done in order to maintain and strengthen Germany's competitiveness in a completely changed global environment.
Habeck called the lack of skilled workers the "biggest challenge" facing Germany, saying that there were already 700,000 job openings in Germany. "We lack the people and brains to do this work, and this gap will continue to widen and will further reduce potential growth. ”
German economic adviser Ulrike Malmendier claimed that the German team of economic advisers plans to follow in the footsteps of ** and lower their expectations for economic growth in 2024. "I think we're definitely moving in the same direction, and that's what our data shows. ”
Germany's advisory council in November last year showed that economic growth in 2024 would be just 07%。The next official update will be in mid-May.
Some German experts also said that after the outbreak of the Russian-Ukrainian conflict, Germany announced that it would abandon the use of Russian natural gas, which led to a surge in energy, which was a heavy blow to German industry. In addition, Germany** has to finance a costly green transition.
Habeck pointed out that Germany's recent budget crisis has left a gap of 60 billion euros (about $65 billion) in fiscal plans for the next few years, which is an additional economic challenge. Affected by the budget crisis, German farmers and other groups have organized large-scale ** activities, and the support rate of Scholz and his three-party coalition**, which has been in power for more than two years, has hit a new low.
Habeck also spoke about the outlook for inflation, which he expects to fall to 2 for the whole of 20248%, and in 2025 it will return to the target range of 2%.
Finance Associated Press Niu Zhanlin).