“Economic output is likely to contract initially, but we expect a gradual recovery from the second half of 2023,” Bundesbank Chairman Joachim Nagel said on Friday, announcing the central bank’s latest forecasts. However, the energy crisis is increasing inflation in Germany.
Bundesbank experts expect Germany’s gross domestic product (GDP) to fall by 0.5 percent in 2023, after growth of 1.8 percent this year. As a result of Russia’s aggressive war, high energy costs are a burden on companies and consumers. Private households are reluctant to consume due to the overall significant rise in prices.
In November, consumer prices in Germany increased by 10.0 percent compared to the same month of the previous year. There is no immediate relief. “Inflation is high and will only come down gradually,” Nagel said.
For next year, the Bundesbank expects inflation to fall from 8.6 percent to 7.2 percent due to the government’s electricity and gas price brake. In 2024, the inflation rate should therefore fall to 4.1 percent.
Economic output in Europe’s largest economy is expected to rise again by 1.7 percent in 2024, according to the Bundesbank forecast. “General economic production capacities should not be used normally again until 2025,” the Bundesbank writes.
On Thursday, the Swiss National Bank (SNB) ruled out the possibility of a recession in this country. According to the SNB projection, Swiss economic growth is likely to be 0.5 percent in 2023. “This is low growth, but we don’t expect a recession,” SNB boss Thomas Jordan said on the occasion of his monetary policy assessment.
As far as inflation is concerned, Switzerland is likely to remain an island of happiness compared to other countries. Average annual inflation, which is 2.4 percent in 2023, should be above the target range of 0-2 percent according to the SNB’s 2023 forecast.
(SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
