Economic situation in Germany and forecasts (Infographic)

Weakness of the German economy

THE ECONOMY SUFFERED A TECHNICAL RECESSION DURING THE WINTER MAINLY DUE TO THE IMPACT OF THE ENERGY CRISIS

GDP fell by 0.3% quarterly in January-March 2023, although it will regain positive rates in the second half of the year

Deterioration of business expectations

For 2023 as a whole, a y-o-y decline of -0.5% is forecast, due to a decline in public and private consumption

Notable moderation in inflationary pressures to 2% by end-2023

Resilience of the labour market, although the unemployment rate rose slightly in Jun.23 to 5.7 %

Target of fiscal consolidation and sustainable public finances

CRITICAL ASSESSMENT OF SPENDING, PRIORITIZATION OF ITEMS AND ONLY NEW STRUCTURAL SPENDING IF THERE IS EFFECTIVE STABLE FUNDING IN RETURN. THE DRAFT 2024 BUDGET ENVISAGES A CUT IN PUBLIC SPENDING OF MORE THAN 30 BILLION EUROS

Oxford Economics expects deficits below 2% in 2024 and around 1% in 2025