German economy shows resilience but lacks momentum

The German economy is showing resilience in a challenging economic environment but growth will remain muted this year, the DIHK Chambers of Commerce and Industry said on Monday, keeping its forecast for GDP to stagnate in 2023.

“Signs of a broad-based upswing continue to be missing,” said Ilja Nothnagel, a DIHK board member, while presenting the report in Berlin.

Despite high energy prices, rising interest rates and the war in Ukraine, companies are showing remarkable resilience. However, the outlook for the coming twelve months remains gloomy, according to a DIHK survey of 21,000 German companies.

As at the beginning of the year, 34% of the companies in the DIHK survey rated their situation as good, 51% assessed their current business situation as satisfactory and 15% as poor. The resulting score of 19 points is slightly below the long-term average of 21 points, DIHK said.

“Overall, we have to conclude that the German economy is lacking impetus,” Nothnagel said. “The global economy and domestic demand are unfortunately failing to provide any impetus at the moment.”

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