The growth of the German economy is estimated at only 0.1 percent this year. That is a major setback, because an earlier estimate expected 1.3 percent growth. The figures confirm the impression that the German economy is doing much worse than expected, Germany correspondent Derk Marseille also notes. ‘The figures have never been so bleak before, and they come from the most reliable source.’
German economy in disastrous situation: ‘Figures have never been so gloomy’
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The forecast comes from five top German institutes that advise the government. Based on this advice, the German government makes decisions about where the money is spent. “Based on that forecast, the government estimates how much tax can be collected and how big the economy will become,” Marseille explains.
But growth this year will be even lower than initially thought. Marseille expects that things will not get much better in the coming year. “Everything is gloom before the Germans enter Easter,” he says. That gloom could also be read on the faces of the German cabinet members who met today.
Measures
“German politicians would like to make plans on how to get the economy back on track,” says Marseille. ‘And with 0.1 percent growth, there are few new plans to make.’ Previous measures by the German government also appear to have had little effect so far. While the decision has been made to invest hundreds of billions extra in defense because of Russian aggression in Ukraine. ‘It was also decided to pump up the Energiewende with more than a hundred million euros after the loss of Russian gas.’
‘If things are disappointing quarter after quarter, then you haven’t done your job properly’
Marseille does note that it is also ‘a bit mean’ to expect that the effects of these measures are immediately reflected in the economic figures, because it concerns long-term investments. ‘But it has been announced that this is necessary to give Germany the wind at its back again. If things are disappointing quarter after quarter, then you haven’t done your job properly,” Marseille concludes.
Popularity Scholz
Most Germans think the same about that. The German government is very low in the polls and the popularity of the ministers and the chancellor is also crumbling. Olaf Scholz therefore seems to do everything he can to show his face in as many places as possible, Marseille notes. ‘He is busy with an offensive with many company visits and keeps talking about it as if there is still a lot of money (…), but you see that the message is not getting through. And it looks like the short-term boost he was talking about won’t actually be reflected in the numbers for the entire coming year.”
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