Olaf Scholz’s government increased the gross domestic product (GDPGermany is forecast to fall by 0.4% this year; This marks a downward correction from the moderate growth expectations he defended even last spring. Minister of Economy and Climate Protection is green Robert Habekpresented updated forecasts on the development of the economy, which remain slightly more optimistic than the forecasts published by the country’s main institutes two weeks ago. Experts later calculated that the contraction in the euro zone’s largest economy would be 0.6% this year. Habeck explained that the consequences of the energy crisis caused by the war in Ukraine are delaying the expected growth, which will not occur until 2024 and will also be moderate (1.3%). A similarly moderate expansion is predicted to reach 1.5% of GDP in 2025. Last spring, the government’s calculations were based on growth of 0.4 percent in 2023, and that growth will accelerate further in the coming years.
The presentation of new government forecasts coincided with other news from the economic field, in this case it was positive. According to the Federal Statistical Office (Destatis), annual inflation in September was 4.5%, the lowest since the beginning of the occupation of Ukraine. This is an indication that the increase in prices is starting to be brought under control in Germany, where it was above 6% in July and August.
Appearing before the media, Habeck repeatedly touched upon the effects of the energy crisis on the entire German economy. He reminded that the interest rate increase continues. European Central Bank It was seen that the ECB, which it described as a “necessary and appropriate measure” to combat inflation, dealt a blow to both private consumption and the construction sector.
But he refrained from making assessments of the hypothetical negative effects on the overall war in the Middle East, the next major conflict. “My department makes estimates, not predictions (…),” he said.
The environmental politician said the situation was “extremely worrying” and that its trigger was the “treacherous terrorism launched by Hamas” against Israel, a state to which Germany recognizes “every right to defend itself”. The commitment to Israel’s security goes beyond Germany’s “historical responsibility” for Israel’s future and is not limited to “problems of the past” but “applies to all assistance, material or political” that it requests.