German minister announces deepening in economical crisis

(MENAFN) German Economy Minister Robert Habeck has publicly acknowledged the worsening economic crisis in the country, conceding that current measures have been insufficient to address the severe economic challenges facing Germany. His remarks, made on Tuesday, came in the wake of a troubling economic indicator that points to a significant drop in Germany's economic outlook.

"The economic crisis is becoming more entrenched at a level of stagnation," Habeck told the media, as reported by Bild. He attributed the deepening crisis to a combination of high interest rates, reduced international demand, and persistent structural issues within Germany's economy.

Germany, the largest economy in the European Union, experienced a recession last year, with a contraction of 0.3 percent, according to data from the German Federal Statistics Office (Destatis). This year, economic activity is projected to stagnate at a minimal 0.1 percent, as forecasted by the European Commission.

Adding to the bleak economic picture, the European economic sentiment index, known as the ZEW index, fell sharply to 19.2 in August. This represents a decline of 22.6 points from July, marking the steepest drop in two years. The index measures economic expectations by polling experts from banks, insurance companies, and financial departments of major firms. The significant decrease in the index reflects growing pessimism among experts, with fewer expecting economic improvement and more anticipating deterioration.

Habeck's acknowledgment of the deepening crisis highlights the urgency of addressing Germany's economic difficulties, which include both short-term challenges like high interest rates and long-term structural problems. As the government grapples with these issues, the outlook for the German economy remains increasingly uncertain.

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