View of the banking district in Frankfurt. Illustrative photo.
Berlin – The German economy will grow by 0.4 percent this year, not by 0.2 percent, as previously estimated. Federal Minister of Economy Robert Habeck announced this today while presenting the spring forecast of economic development. He also said that the pace of slowing inflation will also be slightly faster, the rate of which should be 5.9 percent this year. So far, six percent has been calculated. Next year, according to updated government estimates, inflation will fall to 2.7 percent
“Compared to normal years, the outlook for economic growth of 0.4 percent would obviously not be satisfactory at all, but given what we still had to worry about in the winter, it is significant,” Habeck said. “The German economy has proven to be adaptable and resilient to pressures. The gradual recovery that we saw in the first quarter continues,” he said about the reasons for the more favorable outlook for this year.
The updated outlook also expects a more favorable decline in the rate inflation. The government's winter estimate was based on six percent for this year and 2.8 percent for next year. Today's forecast, on the other hand, reduced the estimate of economic growth for next year, to 1.6 from the previous 1.8 percent.
At a press conference, Habeck told journalists that Germany is facing extremely complex issues in connection with the Russian invasion of Ukraine impacts and problems. He also stated that the economy is also affected by the demographic changes of the aging German population.
The German economy is the largest in Europe and a number of Czech companies depend on it, among other things. According to the Federal Statistical Office, the growth of the German economy slowed to 1.8 percent last year from 2.6 percent the year before. According to the German central bank, the economy returned to growth in the first quarter of this year, after falling by 0.4 percent in the final quarter last year compared to the previous three months.