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