The economy expects only a mild recession

Berlin, Dec 27 (Reuters) – Despite headwinds from the energy crisis, material shortages and a sluggish global economy, Germany’s economy expects only a mild recession this year coming. “The last quarter of 2022 and the beginning of 2023 should be accompanied by a decline in economic activity,” said the president of the Federation of German Industries (BDI), Siegfried Russwurm, in a survey of major associations. published by the Reuters news agency. tuesday. “But we only expect a slight slump.” However, growth will be rather contained until 2024. “Because the whole world is in a phase of weakness,” Russwurm said, referring to Germany’s export-dependent economy.

The German Chamber of Commerce and Industry (DIHK) especially hopes for an end to the disruptions in the supply chain, which still affect four out of ten companies. “Currently, there are many signs that the disruptions are gradually easing: freight rates for container prices are once again approaching normal long-term values, traffic jams in front of international ports are slowly dissolving,” said the chairman of the DIHK, Peter Adrian. “If the announced easing of China’s zero-Covid policy were to be implemented in this way, it would also be a positive signal for global supply chains.” However, the DIHK does not expect an economic recovery before the second half of 2023. “In any case, a recovery in economic output can be expected no earlier than mid-2023,” Adrian said.

The business outlook for companies is currently still very pessimistic. Despite the drag on electricity and gas prices, high energy prices remained a major burden. “Additionally, there is record inflation, which is putting a drastic hold on consumer spending,” the DIHK chairman said.

The Central Association of German Handicrafts (ZDH) sees it very similarly. “High energy costs, even tighter supply chains and falling real consumer incomes are already being felt in craft businesses, as there are significantly fewer new orders,” said Holger Schwannecke, General Secretary of the ZDH. “The order book will last until early spring, but there are many question marks for what’s next.” Trade as a whole has weathered the current crisis well so far. However, particularly affected energy-intensive companies should be relieved on the cost side and their existence secured in order to be able to survive the acute phase of the crisis.

According to the Federal Association for Wholesale, Foreign Trade and Services (BGA), the situation in many sectors of the economy remains solid. “But we are pushing the negative expectations month by month, which have not yet materialized in their depth and breadth,” said BGA Chairman Dirk Jandura. The modernization and simplification of the legal framework for investment and employment in Germany is now necessary. “Not only the economic pressure, but also the political pressure to do this is increasing,” Jandura said. “In this regard, I am confident that we can resume a more positive path during the spring.”

Economy expects only mild recession – ‘disruptions lessen’

Source: Reuters

Symbolic photo: Image by Gerd Altmann on Pixabay

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