Finance Minister Habeck lowers forecast: only 0.2 percent growth is expected

Finance Minister Habeck lowers forecast: only 0.2 percent growth is expected

According to a report by www.tagesschau.de,

Federal Economics Minister Robert Habeck has warned of dramatically poor growth forecasts for Germany. The government plans to lower its previous economic forecast from 1.3 percent to just 0.2 percent growth. Habeck cited the consequences of the Federal Constitutional Court's budget ruling and the associated lower investment activity by the population as the main reason for the lowering of the forecast. Other departments, including Federal Finance Minister Christian Lindner, expressed similar concerns about low growth. The growth forecast from autumn 2023 has long been considered unrealistic, as German gross domestic product shrank by 0.3 percent in the fourth quarter of 2023.

These developments could have a worrying impact on the market and the financial industry. Low economic growth can lead to weak demand for investment, lower consumer confidence and rising unemployment. Economic stagnation is expected to affect inflation and lead to an overall slowdown in economic activity.

Habeck's call for increased investment by the federal government and the traffic light government's planned measures to strengthen the business location could help mitigate negative effects on the market and the financial sector. Investments in infrastructure projects and economic incentives are possible tools to stimulate economic growth.

Overall, Germany's low growth forecast for 2024 represents a serious challenge that requires careful monitoring and targeted intervention to mitigate possible negative impacts on the market and financial sector.