Economic growth: Robert Habeck forecasts a small plus – economy

The cardboard board should not be missing from an annual economic report. Robert Habeck holds it up to the cameras, and of course the curve goes up towards the back. “Minus twelve percent would no longer fit on the blackboard,” says the Green Economics Minister. “Just looking at it tells the story.”

It was only a little over half a year ago that such horror numbers were circulating. The Bavarian Business Association warned in June that German growth could collapse by 12.7 percent if Russian gas supplies were completely stopped. Other forecasts weren’t quite so dire, but it was the time when even the bleakest scenarios seemed possible. This Wednesday, in the house of the federal press conference, it seems very, very far away.

Habeck puts the cardboard away again and the photographers take their seats again. The fact that it didn’t happen that way, he now says, “is something that didn’t just fall out of the sky.” The country has shown what it can do. “We worked our way out of the crisis step by step,” says Habeck. And of course the determination of the government also played its part.

In fact, the Green Economics Minister can, for the second time in a row, show a way out of a crisis, which has never been granted to anyone before him. 2022 was supposed to be the year in which Germany managed to get out of the corona crisis. In the previous report, exactly a year ago, no one had war and the energy crisis on their radar. And 2023 should now be the year in which the country also leaves war and crisis behind, at least as far as the economy is concerned. It was possible to avert a serious crisis, says Habeck. “We made the crisis manageable.”

As recently as autumn, his ministry had assumed a minus of 0.4 percent in gross domestic product for 2023, now the forecast is 0.2 percent – plus. An increase of 1.8 percent is now considered possible for next year. As always, the numbers are price-adjusted, so it’s not inflation that’s driving growth. Last year it was 7.9 percent, the highest it has been in decades. In the current year, according to the forecast, it will weaken to six percent.

The chic curve on Habeck’s cardboard coincides on Wednesday with data from the Munich Ifo Institute. Its business climate index has improved for the fourth time in a row. “We expect the economy to pick up momentum,” says Elga Bartsch, Habeck’s new chief economist. Which would clear the way for the project that war and crisis had kept Habeck from doing: the green transformation of the economy. Only he has a new word for it: “transformative supply policy”. The aim is to strengthen those areas that a climate-neutral economy needs. Habeck admits that the term is a bit “intellectualistic” – but it could also be a lure for the Ministry of Finance: The house of FDP boss Christian Lindner is pushing for such a supply policy that makes life easier for companies.

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