Germany forecast to narrowly escape recession in 2023

GERMANY is expected to narrowly avoid a recession this year with a price-adjusted growth of 0.2 per cent, a source said on Wednesday (Jan 18), citing estimates from a draft of the government’s annual economic report.

This is to be followed by a 1.8 per cent growth in gross domestic product (GDP) next year, based on the draft report, the source said.

The economy ministry declined to comment on the report, which is to be published on Jan 25. It said the forecasts were not yet finalised.

In autumn, the government had forecast a 0.4 per cent decline in GDP for 2023.

According to the source, the government is also set to pare its inflation forecast for 2023 to 6 per cent, with inflation expected to ease further in 2024 to 2.8 per cent.

On Tuesday, German Finance Minister Christian Lindner said inflation this year was expected to be lower than the government’s autumn forecast of 7 per cent due partly to a fall in energy prices. REUTERS