Habeck explains: Why the recession is hitting Germany again!

Habeck explains: Why the recession is hitting Germany again!

On Wednesday, Federal Economics Minister Robert Habeck appeared before the press to explain the continuation of the economic slump in Germany. The optimistic forecasts of his government and leading economic institutes have not come true: the German economy is still in recession. For the second time since the founding of the Federal Republic, the gross domestic product has shrunk in two consecutive years. As apollo-news.net reports, Habeck admits that there are deeper structural problems that have existed for decades.

In his speech at the federal press conference, Habeck drew attention to a number of challenges that are hampering German economic growth. Transition problems with digitalization, dilapidated infrastructure such as late trains and crumbling bridges, as well as a low immigration rate are among the points of criticism. According to Habeck, there is also a lack of sufficient investment and a higher female employment rate.

Optimistic future prospects despite recession

However, Habeck did not want to blame himself or his government for the current economic misery. Despite the gloomy situation, he was surprisingly confident and predicted that the economic recovery would only be delayed. The federal government is now expecting a positive turnaround in the coming years: price-adjusted economic growth of 1.1 percent in 2025 and even 1.6 percent in 2026 are in the projections.

However, this optimistic outlook contradicts the recently revised figures. Because the expectations for 2023 were scaled down from an initial 0.3 percent growth to negative growth of 0.2 percent. These economic slumps could become a problem not only for the German economy, but also for the traffic light government, of which Habeck is a member. The federal budget for 2025 was based on the optimistic growth forecasts from the spring, but the expected tax revenues will probably not flow in at this level.

No blame, but action required

Habeck emphasized that steps have been taken to solve the problems in the long term. His focus is on promoting immigration and investment as well as increasing women's employment rates, especially after pregnancy. The challenges are clearly identified, but the path to solving them seems long. It remains to be seen whether the planned measures will have an effect and whether the desired improvement will occur in the foreseeable future.

Provides a deeper analysis of these events and their potential impact on the German economy the article from apollo-news.net.