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Germany remains in recession: traffic light coalition under pressure!
The federal government expects the recession in Germany to continue and sees the traffic light coalition's budget planning at risk.
Germany remains in recession: traffic light coalition under pressure!
The gloomy forecast for the German economy is a real wake-up call! Despite all hopes, we have stumbled on the economic fast lane in 2023 and the traffic light coalition is facing a tough challenge. Budget planning becomes complicated - the financial situation could become a lot more tense!
According to new reports from the “Süddeutsche Zeitung”, the federal government has drastically lowered its economic expectations. Economics Minister Robert Habeck (Greens) will present the alarming facts on Wednesday: Germany's economy is expected to shrink by 0.2 percent - a bitter disappointment, because just a few months ago there was talk of an increase of 0.3 percent for 2024.
The traffic light coalition under pressure
Reluctance to buy is the big issue that will weigh down the economy over the course of this year. The traffic light coalition should therefore feel the consequences of this lull directly, which further complicates budget planning for 2025. But there is hope: the aim is for an economic upturn at the turn of the year - the path back to strength should soon be paved.
And the whole thing depends heavily on the government implementing its growth initiative quickly and without complications! This initiative includes tax incentives for companies willing to invest, work incentives for older employees and skilled workers from abroad and a drastic reduction in bureaucracy - all of this is intended to reduce the high electricity prices for producers in the long term!
Optimism despite the crisis
But Robert Habeck is optimistic about the future! Despite the current conditions, an increase in gross domestic product (GDP) of 1.1 percent is predicted for 2025, and even 1.6 percent for 2026 seems possible! However, the prerequisites are clear - the measures must now be implemented rigorously, because time is of the essence.
“A first, necessary step is this federal government’s growth initiative,” emphasizes Habeck. “The opportunities are there, we have to take advantage of them now!” This is an urgent call to all decision-makers in the federal states, especially to those in government from the CDU and CSU! The economic recovery should be pushed forward together, a real ray of hope in the dire situation.
But there are also critical tones: one growth initiative is often followed by another - and in the current situation the truth may be quite uncomfortable. But the message is clear: we need more to get the economy going!