Germany's economy minister said the country is "not sick, and only needs a cup of coffee to get over the fatigue", when speaking at the World Economic Forum (WEF) Davos 2024, on January 19.
German Economy Minister Christian Lindner said Germany was "in the early stages of a reform period". Lindner added that what they needed now was "a good cup of coffee", meaning restructuring, but did not elaborate.
"I know what you're thinking: Germany is probably the sick man of Europe. But no, Germany is just a tired man after waking up," he said.
Germany's economy was labeled the "sick man of Europe" in the late 1990s, when the economy stagnated and unemployment soared. Germany then implemented a series of labor market reforms. Europe's largest economy boomed for a decade after the 2008 financial crisis.
However, in recent years, the country has experienced consecutive years of crisis. Forecasts of low growth rates may be a wake-up call for them.
German Economy Minister Christian Lindner at WEF on January 19. Photo: Reuters
Last year, Germany's GDP contracted by 0.3% amid persistent inflation, high energy prices and weak foreign demand. This was the first time since Covid-19 that Germany has recorded negative growth.
Lindner said 2023 was a year of challenges, from the rise of artificial intelligence to the fragmentation of the global economy. Nearly every sector declined last year, especially manufacturing, which was hit by slowing Chinese demand, rising energy costs and high interest rates.
Household and government spending also fell. German public spending fell for the first time in nearly 20 years.
In an interview with Reuters a day earlier, Lindner said he expected Germany to see higher growth in the medium term. However, economists said the factors that have dragged down the German economy will remain in place in the first months of 2024 and could even have a major impact on the country.
Ha Thu (according to Reuters, CNN)
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