CAPTION: German Economy Minister Robert Habeck at the presentation of German GDP forecast for 2023. (picture alliance/dpa)
The German government is lowering its economic forecast for 2023, expecting a 0.4% decline in output, according to its autumn projection presented in Berlin on Wednesday.
In 2024, the economy is expected to grow by 1.3%. In the spring projection, an increase in the gross domestic product (GDP) of 0.4% this year and 1.6% next year had been predicted.
Economy Minister Robert Habeck spoke of "economic difficulties." He cited the aftermath of the energy price crisis, the need for the European Central Bank (ECB) to fight inflation and the weakening of important global economic partners as reasons.
Habeck said growth problems had to be solved. There are major structural challenges, he said, citing problems such as excessive bureaucracy and skilled labour shortages.
The coalition government has been arguing for a long time about relieving the burden on companies that complain about high electricity prices compared to other countries - for example through a state-subsidized electricity price for industry.
Meanwhile, inflation in Germany fell to its lowest level in 18 months in September, the Federal Statistical Office (Destatis) reported on Wednesday.
Consumer prices were 4.5% higher than in the same month last year, Destatis said, confirming initial estimates two weeks ago. In August, inflation stood at 6.1%.
The last time a lower inflation rate was registered was in February 2022, when it stood at 4.3%.
Economists expect inflation will continue to ease up to the end of the year.
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