Habeck admits all is not well with German economy as GDP declines

Admin I Tuesday, October 08, 2024

 

BERLIN – German Economy Minister Robert Habeck on Monday admitted that the country’s economy is performing poorly, as a report suggested a new government forecast expects domestic product (GDP) to decline in 2024.

Habeck said in Berlin that economic data was being adjusted “downwards,” appearing to confirm a report by the Süddeutsche Zeitung newspaper that GDP is now expected to drop 0.2% for the year, down from previous estimates of a 0.3% increase.

The minister is due to present the figures, which also include a forecast of 1.1% growth for 2025, on Wednesday. Habeck said the coalition government’s growth initiative would provide a stimulus to the German econoomy.

The proposal still requires approval from the German parliament.  Meanwhile,  Germany reported a sharp drop in factory orders in August, preliminary figures from the national statistics agency showed on Monday.

Incoming orders fell 5.8% in August, Destatis said, after rising 3.9% in July, revised up from 2.9%. The latest figure – far beyond the 1.9% decrease expected by economists – marked the steepest decline in orders since January’s 10.9% drop.

On a year-by-year basis, orders dropped 3.9% in August, after a 4.6% rise in July.

The setback was partly attributed to a fall in large orders, especially in the category of “other vehicle manufacturing,” which includes the production of aeroplanes, ships, trains and military vehicles.

Excluding large orders, German businesses reported a 3.4% fall in demand in August. Other factors included a drop in foreign orders, the Wiesbaden-based agency said.