Economists predict: German economy will be in shrinking mode in 2023

Economists predict: German economy will be in shrinking mode in 2023

According to a report by web.de economists have downgraded their forecast for the German economy. Experts expect economic output to shrink by 0.4 percent in 2023. The prospects for 2024 are also not rosy, with only minimal growth of 0.7 to 1.3 percent.

This forecast downgrade is due to several factors, including the impact of the energy price crisis, a decline in domestic demand and geopolitical conflicts. Structural problems such as a lack of workers and too little modernization in companies could slow down the economy for decades, experts warn. Although private consumer spending is recovering and the inflation rate is expected to fall, the global economic recovery is slow, especially in China.

The impact of this forecast on the financial market and the financial industry could be far-reaching. Investors may be cautious about their investments, which could lead to a decline in economic activity. Banks and financial institutions could become more cautious when it comes to granting loans, which could have a negative impact on the economy.

However, the economists' proposals, including more incentives for employment, reform of immigration policy and more investment, could have positive effects on the long-term development of the German economy.

Overall, the new economic forecast shows the ongoing uncertainty in the German economy and requires careful monitoring and adjustment of investment strategies and financial planning.