Recession, yes or no. That has been the big question for several months now.
Germany’s gross domestic product shrank by 0.2% in the fourth quarter. However, a severe winter recession, which was feared in the autumn, has become less likely. Nevertheless, the risks to the economy remain high. I am somewhat more pessimistic regarding economic growth in 2023 than some of my colleagues.
The International Monetary Fund published its economic outlook (in my opinion, it is a bit too optimistic):
The German economy is proving remarkably robust under challenging conditions, even though the economic situation remains gloomy.
The German economy is probably facing a recession, even if the outlook has recently improved somewhat.
After the midterm elections in the U.S., there is hardly any time to take a deep breath on the political level.
I expect a mild recession, but only a sluggish recovery thereafter at the end of 2023 and in 2024.
The German economy continues to face fierce headwinds from the energy crisis, high inflation rates, and the cooling global economy.
As always when Chad Bown publishes a piece, I can only recommend it!
Recession, yes or no? Many economists have been pondering this question.