Robert Habeck and the industry do not believe in a quick improvement of the economic situation.

Chemieanlage im sächsischen Böhlen: Auch mittelfristig ist noch keine Besserung in Sicht

There is still no improvement in sight for the chemical plant in Böhlen, Saxony, in the medium term.

Foto: Jan Woitas / dpa

The Federal Ministry of Economics and the Federation of German Industries (BDI) do not anticipate a quick turnaround in the economy. Early indicators such as order intake and business climate, as well as the sluggish global economic development, suggest a weak third quarter, according to a report presented on Wednesday by Minister Robert Habeck’s (Green Party) ministry. „A noticeable economic recovery can be expected at the earliest by the end of 2023 or the beginning of 2024.“

The current economic report from BDI also sounds pessimistic. It states that „the economic recovery continues to be delayed after a weak winter half-year 2022/23. Not only is the current sentiment in companies low, but there is also no improvement in sight in the medium term.“

The BDI expects a shrinking economy in the current year. The Gross Domestic Product is likely to decrease by 0.4 percent. „The German economy is stagnating after the recession in the winter half-year.“ In June, the BDI had anticipated a stagnation.

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The explanation given was that the growth impulses from foreign trade have significantly weakened. Adjusted for inflation, exports are expected to fall by 0.5 percent in 2023. „The reason is not only the weak business with China but also the restrained global economic development.“ Although supply shortages are decreasing, the increasing number of missing orders is becoming a hindrance to production.

Die höchste Inflation seit Jahrzehnten bremst zudem die Nachfrage von Privatverbrauchern. Allerdings entwickele sich der Konsum besser als befürchtet. Der BDI rechnet hier nun im Gesamtjahr mit einem Minus von 0,5 Prozent. »Die Reallöhne sind drei Jahre gesunken und erholen sich nur langsam.«

The German government initially projected a growth of 0.4 percent in the gross domestic product for this year. However, this is likely to be revised downwards in the autumn projection as well.