Economists generally believe that due to the German economy, which has long been regarded as the engine of Europe, stumbling amidst sustained industrial weakness, Germany may not be able to avoid a second recession this year. According to a survey of economists, Germany's gross domestic product (GDP) will decline by 0.2% in the quarter ending September, and may further decline by 0.1% by the end of 2023. These economists' predictions indicate that Germany's current economic recovery is weak.
Dennis Huchzermeier, senior economist at the German Business Daily Research Council, said: "Due to several structural issues, economic growth will remain weak for many years to come." He added, "As a result, the German economy will shrink this year" and face "growth weakness" in the coming years.
Overall expectations also indicate that the German economy will not experience any meaningful expansion in the following five quarters.
This highlights that sluggish export demand and energy crisis have left Europe's largest economy lagging behind its regional peers. This situation has once again aroused people's memories of the 1990s, when Germany was labeled as the "sick man of Europe".
The forecast shows that Germany's GDP will decline by 0.4% in 2023 and only rebound by 0.5% next year. Compared with the latest forecasts from the International Monetary Fund (IMF) and the German government, this rebound is much weaker, with the former being 0.9% and 1.3%, respectively.
Regardless of the outcome next year, the country's prospects will continue to plague global financial officials.
We believe that (German economy) growth faces long-term challenges, "IMF Deputy Director for Europe Oya Celasun told reporters in Marrakech, Morocco last Friday." Germany has a lot to work on
On the same day, Deutsche Bank CEO Christian Sewing stated in an interview that Germany needs to carry out structural reforms "in areas such as energy prices, infrastructure, immigration, etc.
If we do this, I think Germany will see growth again, "he said." It may not happen in 2024, but starting from 2025
However, German Finance Minister Lindner, who attended the meeting of the International Monetary Fund in Marrakech, insisted that Germany's economic prospects remained bright.
The prophecy of bad luck is inappropriate, "he said." Germany has enormous potential for recovery and a solid economic foundation, and we are determined to strengthen these foundations