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Germany’s economy will decline slightly in 2023, with output contracting by 0.3% year-on-year, driven by expensive energy, high interest rates and declining foreign demand.
Energy-intensive manufacturing and construction sectors have been affected by soaring energy costs, and economic headwinds have been significant. Germany is expected to see 2023 be the weakest year since 2020. Inflation has led to competitive pressures in Germany, and interest rate hikes in the eurozone have further exacerbated the dilemma.
While a modest recovery is expected in 2024, with the Bundesbank forecasting growth of 0.4%, the German government’s budget chaos, the Middle East conflict and other uncertainties have raised concerns.
(Source: AFP Image source: freepik)
