Germany industry lobby expects economy to stagnate in 2023

GERMAN industry association BDI on Monday (Jun 19) said it expects the economy to stagnate this year as a drop in investments, high inflation and a skilled workers shortage weigh on growth.

“We are in a recession. For 2023, the BDI expects a sobering plus-minus zero percent for gross domestic product compared to the previous year,” BDI president Siegfried Russwurm said in a statement, adding that a noticeable recovery would come only next year.

BDI said it saw a rise in equipment and patents investments, but a drop in the construction business - which accounts for more than half of gross fixed capital formation - dragged on the economic forecast.

“Germany is facing a mountain of great challenges. Politicians must tackle structural reforms systematically,” Russwurm said, calling for better tax framework conditions for investments and an accelerated planning and approval procedures.

“The impatience and insecurity of many entrepreneurs are increasing,” he added. REUTERS