Bad prospects
Even the government does not believe the economy is capable of a revival
08/14/2023 1:07 p.m
The economy in this country is currently stagnating. According to the Ministry of Economic Affairs, there is no sign that the gloomy situation will change anytime soon, as there are too many indicators to the contrary. Germany is also in a bad position compared to other countries.
According to the federal government, there are currently no signs of a sustained revival of the sluggish economy in Germany. According to the monthly report published by the Ministry of Economic Affairs, the still weak external economic conditions are dampening production and export development: “Current leading indicators such as incoming orders and the business climate, but also the restrained development of the global economy, do not point to a sustained economic revival in Germany for the time being.” In addition, a reduced dynamic on the labor market is to be expected in the coming months. The companies planned fewer new hires.
Private consumption initially stabilized in the second quarter after the significant declines in winter. Overall, however, the leading indicators “at the current edge” speak for a subdued development. “With inflation rates continuing to fall and collective bargaining agreements rising, an increasing revival of private consumption can be assumed overall,” the ministry led by Robert Habeck said.
The economy in Germany has been languishing recently: the gross domestic product stagnated in the spring after two consecutive quarters of shrinking economic output. Leading indicators such as the Ifo business climate suggest that the economic slowdown has not yet been overcome.
According to the International Monetary Fund (IMF), Germany is performing extremely poorly in comparison with other industrialized nations – as the only large country with economic output likely to shrink this year. In its summer forecast, the IMF predicts a drop in gross domestic product of 0.3 percent.