Suche
Mein Konto
German economy will shrink in 2023: inflation, rising interest rates, weak global economy and gloomy forecasts.
According to a report from www.bild.de, the German economy shrank by 0.3 percent last year. This is due to various factors such as high inflation, rising interest rates and the weak global economy. Private consumption as a support for the economy was no longer available as many people turned down the red pencil due to significantly higher consumer prices. The inflation rate was 5.9 percent, which led to a dampening of the purchasing power of private households. Foreign trade made a positive contribution, as imports fell more sharply than exports. Construction investments also fell. Experts expect slight growth at best for the current year, and some are even predicting a renewed...
German economy will shrink in 2023: inflation, rising interest rates, weak global economy and gloomy forecasts.
According to a report from www.bild.de, the German economy shrank by 0.3 percent last year. This is due to various factors such as high inflation, rising interest rates and the weak global economy. Private consumption as a support for the economy was no longer available as many people turned down the red pencil due to significantly higher consumer prices. The inflation rate was 5.9 percent, which led to a dampening of the purchasing power of private households. Foreign trade made a positive contribution, as imports fell more sharply than exports. Construction investments also fell. For the current year, experts are expecting at best slight growth, and some are even predicting a further decline in economic output. The European Central Bank (ECB) is combating inflation with the highest interest rates in its history, which led to a collapse in demand in the construction industry. The weak global economy and political uncertainty have also contributed to the problems.
The impact of these developments on the market and the financial sector is significant. High inflation rates and rising interest rates are affecting consumers' purchasing power and can lead to further reluctance to consume. The construction industry will particularly suffer from high financing costs, and export-oriented companies will continue to face the effects of the weak global economy. Political uncertainties could also contribute to companies holding back investment plans.
Overall, the outlook for the new year appears to remain clouded and this is expected to be reflected in weak investment figures. The DIW only expects economic growth of 0.6 percent for 2024, while some banking economists such as Commerzbank chief economist Jörg Krämer even expect a further decline of 0.3 percent.
This negative forecast poses major challenges for the financial sector, as uncertainty could lead to a more cautious approach to investments and loans. It will be crucial how governments and central banks respond to these developments in order to mitigate potential consequences for the market and the financial industry.
Source: www.bild.de
Read the source article at www.bild.de