German Chancellor confirms that the largest economy in Europe will escape recession

German Chancellor Olaf Scholz announced in an interview, on Tuesday, that Germany “will not enter into a recession” in 2023, despite the tense situation of its economy in the face of the energy crisis.

“I am absolutely convinced that this will not happen, and that we will not enter into a recession,” he told Bloomberg.

In its forecast for fall 2022, the government bet on a contraction of 0.4 percent of GDP this year.

Many economic institutes and experts also bet on the decline in accumulated wealth in 2023, even if they bet on a limited decline in the gross domestic product.

“We have shown that we can handle very difficult situations,” Olaf Scholz said in support of his statement.

The energy crisis caused by the war in Ukraine negatively affected the German model, which relies mainly on importing cheap gas from Russia.

The war put an end to Russian supplies of gas, causing prices to rise in Europe during the course of the year.

Inflation and industrial production costs, the engine of German growth, rose, raising fears of a major economic crisis in the country.

But Europe’s largest economy has held up better than expected, thanks to strong consumption, state aid and significant energy savings in the industrial sector.

“I don’t think anyone really expected that we would easily escape a situation where Russian gas supplies to Germany would stop completely,” Schulz added.

(AFP)