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<\/a><\/p>\nBERLIN (Reuters) -The German government has raised its economic growth forecast for this year to 0.4% from a previously predicted 0.2%, according to its spring economic projections published on Wednesday and first reported by Reuters last week. <\/p>\n
“A gradual recovery is underway, despite a persistently difficult environment,” German Economy Minister Robert Habeck said. He expects stagnation in the first quarter, followed by an acceleration in growth. <\/p>\n
With the new projections, the government is slightly more optimistic than the five economic institutes that prepare the Joint Economic Forecasts, which foresee 2023 economic growth of 0.3%.<\/p>\n
Current economic indicators such as industrial production, orders received and business climate point to an economic revival in the course of the year, the report said. <\/p>\n
“For next year, we expect the recovery to continue and gain in breadth,” Habeck said. <\/p>\n
For 2024, the government slightly lowered its growth forecast to 1.6% from the 1.8% foreseen in January.<\/p>\n
Inflation forecasts were also adjusted down, with the rate for both 2023 and 2024 now seen 0.1 percentage point lower, at 5.9% and 2.7%, respectively. Inflation stood at 6.9% last year. <\/p>\n
Despite government support measures and rising incomes, private consumption will be weak due to inflation-related losses in purchasing power, the report said, forecasting a 0.1% drop in 2023. It will only pick up again later in the year as inflation continues to decline. For 2024, the government sees a 2.1% increase in private consumption. <\/p>\n
Given the continuing high demand for labour, employment is expected to continue to grow this year and next, albeit at a somewhat less dynamic pace. The government expects an unemployment rate of 5.4% in 2023 and 5.2% in 2024, following 5.3% in 2022. <\/p>\n
Exports are likely to provide impetus but remain at a rather low level by long-term standards. Sentiment among German exporters has rebounded in April to the highest point seen since the outbreak of war in Ukraine last year, according to a survey by the Ifo economic institute released on Tuesday. <\/p>\n
The government forecasts export growth of 1.3% in 2023 and 3.3% in 2024.<\/p>\n
(Reporting by Maria Martinez, Editing by Rachel More, Miranda Murray and Friederike Heine)<\/p>\n
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