Berlin (Reuters) – Slowed down by the energy crisis and high inflation, the German economy is currently in reverse gear from the Federal Government’s point of view.
The third quarter went better than expected and the German economy grew, the Federal Ministry of Economics (BMWK) said on Monday. For the further course, however, the federal government expects a decline in economic output in the winter half-year 2022/23. “The persistently high energy prices, rising inflation and the associated loss of purchasing power are increasingly affecting economic development in Germany,” explained the BMWK.
The inflation rate rose to 10.4 percent in October, the highest level since December 1951. According to the Ministry, the labor market remained robust in October. But traces of the more unfavorable economic prospects are recognizable. In view of the bottlenecks on the labor market, companies are trying to keep their employees. Current leading indicators and surveys point to increasing insolvency figures in the coming months. “However, a wave of bankruptcies is currently not in sight.”
The federal government assumes that the German economy will grow by 1.4 percent in the year that is coming to an end. For 2023, she expects gross domestic product to fall by 0.4 percent.
(Report by Reinhard Becker, edited by Klaus Lauer. If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or [email protected] (for companies and markets).)