Photo shows German Minister for Economic Affairs and Climate Protection and Deputy Chancellor Robert Habeck during the weekly cabinet meeting on February 21, 2024 in Berlin, Germany.
Florian Gartner | Photography Library | Getty Images
German Economy Minister Robert Habeck said on Wednesday that Germany’s gross domestic product is expected to grow by just 0.2% this year as the country finds itself in “tricky waters.”
The revised GDP growth forecast is lower than the previous forecast of 1.3%. Habeck added that the government currently expects German GDP to grow by 1% in 2025.
Speaking at a press conference, the minister attributed the forecast revision to an unstable global economic environment, slow growth in world trade and rising interest rates.
“The economy is in a difficult predicament,” Habeck said in a statement. online, according to a CNBC translation. “We are emerging from the crisis slower than we would like.”
He said this was despite falling energy costs and inflation and a renewed increase in consumer spending power. Nonetheless, Habeck insisted that Germany had shown resilience in the face of the loss of Russian seaborne supplies of crude oil and petroleum products due to the war in Ukraine.
The country narrowly avoided recession in the second half of 2023, although GDP fell by 0.3% in the fourth quarter.
Habeck also talked about the outlook for inflation, saying he expected inflation to fall to 2.8% in 2024 before returning to the 2% target range again in 2025.
