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24 May, 2023 05:53

Germany facing zero growth – survey

Energy and raw materials prices along with a shortage of skilled workers pose major threats to the economy, a study has found
Germany facing zero growth – survey

The German business community has little optimism about growth prospects in the EU’s largest economy, Bloomberg reported on Monday, citing a study conducted by the Association of German Chambers of Industry and Commerce (DIHK).   

After two quarters of zero growth, respondents from 21,000 companies that took part in the survey said there were little signs of improvement in the economic environment.  

Despite the resilience that German companies have shown during the months of soaring energy prices and rising interest rates “the outlook for the next 12 months remains murky — especially since incoming orders are noticeably decreasing on the demand side,” DIHK CEO Ilja Nothnagel said in a statement.  

Researchers at the DIHK maintained a forecast of zero growth in Germany this year. Although more pessimistic than the 0.2% expansion expected by the European Commission, it matches a recent outlook put out by the International Monetary Fund.  

Last week, the IMF issued a forecast saying German GDP growth will “stay near zero in 2023, before gradually strengthening to 1%-2% during 2024-26 as the lagged effects of monetary tightening gradually dissipate and the economy adjusts to the energy shock.”  

Economists are predicting that German industry will remain at a stand-still instead of the hoped-for recovery, dampening prospects of an economic resurgence.  

The DIHK survey has highlighted prices of energy and raw materials as the biggest threat facing German businesses, while a lack of qualified workers was seen as another major structural challenge for companies in the future.

For more stories on economy & finance visit RT's business section

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