IMF apparently increases economic forecast for Germany

Kristalina Georgieva

The head of the IMF plans to present the fund’s updated economic expectations at the end of January.

(Photo: Bloomberg)

Davos, Berlin IMF boss Kristalina Georgiewa has signaled an increase in the economic forecast for Germany for the current year. At the World Economic Forum in Davos on Friday, she said the forecast could be raised to the level of economic growth of 0.5 percent.

In October, the International Monetary Fund (IMF) had estimated a minus of 0.3 percent. Nevertheless, from the IMF’s point of view, the global economic outlook will not change dramatically compared to the October forecast.

At the end of January, the IMF will update its estimates, which have received a great deal of attention on the financial markets, also for the individual countries and regions. For the global economy, Georgieva promised a bottoming out. However, it should only increase by 2.7 percent in 2023, after 3.2 percent in 2022. Both are comparatively low values. The greatest challenges are the Russian attack on Ukraine, high inflation and rising interest rates.

Federal Economics Minister Robert Habeck also expressed more optimism about the prospects for the German economy in Davos this week. The reason for this is that the gas shortage that was feared a few months ago should no longer occur. According to Habeck, the energy crisis is now manageable.

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The Green politician will present the annual economic report with new forecasts on Wednesday next week. According to Reuters information, he no longer expects a recession. Growth of 0.2 percent is therefore assumed for 2023. In October, the government had expected a minus of 0.4 percent. Inflation is likely to remain high at 6.0 percent, albeit lower than previously estimated.

More: Why the recession in Germany could not happen

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