German Economics Minister Robert Habeck
German Economy Minister Robert Habeck called on Friday for “action” to improve economic performance, after recording a zero growth rate for the national gross domestic product in the second quarter.
“We continue to see economic difficulties caused by the repercussions of the energy crisis, the necessary (ECB) war against inflation, and the weakness of important economic partners worldwide,” said Robert Habeck.
Gross domestic product growth in Europe’s strongest economy was non-existent between April and June at a quarterly rate, according to final data confirming preliminary estimates issued at the end of July.
The gross domestic product declined, respectively, by 0.4 percent and 0.1 percent in the previous two quarters, according to corrected data for prices and seasonal fluctuations.
“The restrictive interest rate environment and the weakness of the global economy, especially developments in China, add to the difficulties for us as an exporter,” the minister continued.
But Habik stressed that there is a “glimmer of hope” for the local economy, saying, “Net income has increased slightly in real terms. Private consumption has stabilized and the inflation rate continues to decline.”
But Germany’s economy is lagging behind its main partners, “therefore it is necessary to move,” according to the Minister of Economy.
He cited the need to “remove barriers to investment” and remove the “bureaucratic jungle”.
Robert Habeck also wants to create a €211 billion “Climate and Transition Fund” and for parliament to quickly adopt a bill on skilled migration that he hopes will solve a labor shortage affecting many sectors.
He added that another solution is to adopt “smart measures to provide low-cost electricity to the industrial sector,” which has been severely affected by high energy prices since the start of the Russian war in Ukraine.
But adopting all these necessary remedies may be difficult in light of the divisions between the ruling coalition parties with divergent views.
Although German GDP has passed a technical recession – that is, two consecutive quarters of contraction – this may be temporary, as the purchases index recorded two large declines in July and August, indicating that a further decline in German GDP is on the horizon in the summer quarter.
And the German economy could end the year with a negative result, bottoming out the group of eurozone countries.
During the year 2023, the main German economic institutes expect a decline of between 0.2 percent and 0.4 percent in Germany’s gross domestic product, while the International Monetary Fund expects a decline of 0.3 percent.
Germany News
2023-08-25 18:15:36
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