Recession risk returns to Germany which seemed to have moved away, just like the last quarter of the year German economy decreased. According to the latest data released yesterday by Statistics Germany, the GDP of Europe’s largest economy shrank by 0.2%. This means that if something similar happens again in the first quarter of this year, the eurozone’s largest economy will slide into decline. recession. This is, after all, the forecast of Salomon Fiedler, an economist at the investment bank Berenberg, who emphasizes that “after a mild winter recession, the German economy will stabilize in the spring and begin to grow again by mid-2023.” . . .

In recent weeks, a number of important indicators have shown that confidence in Germany is strengthening. The decisive factor was the mild winter, which made it easier for her to accumulate reserves in natural gas reservoirs, removing the risk of energy shortages during a period of increased heating demand.

Meanwhile, wholesale fuel prices have fallen, rekindling hopes that inflation will slow faster than originally thought. But now the manufacturing sector, which is crucial to the German economy, is recording a drop in orders. Demand is declining, and this is largely due to higher production costs as industries continue to pass it on to consumer prices. Similar events were recorded in Sweden, which also unexpectedly contracted in the fourth quarter of last year. Last week, Berlin forecast growth of 0.2% this year, while the previous forecast was a contraction of 0.4%.

Economy Minister Robert Habek eventually warned that the risk of a recession remained and that the crisis caused by Russia’s invasion of Ukraine was not over. The picture of the German economy remains uncertain. Economic analysts say inflation could prove extremely resilient as it is fueled by demands for higher wages. Illustrative is the case of postal workers who went on strike demanding a 15% increase in wages. It’s the same with civil servants who are demanding double-digit pay increases.