The economy is projected stagnate in 2023 and grow by 1.3% in 2024. High inflation is reducing real incomes and savings, damping private consumption. Export growth will recover through 2023 due to easing supply chain bottlenecks and a record-high order backlog. Investor and consumer confidence have improved due to strong energy price support, swift substitution of energy imports from Russia and declining energy prices.
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The pandemic is likely to accelerate digitalisation with new business models and increases in demand for teleworking, telehealth services and remote learning. The energy transition requires changes in behaviour, consumption and production. In order to face these challenges while supporting the recovery, Germany needs to boost investment in infrastructure and knowledge-based capital, revive business dynamics and address skills bottlenecks.
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2021 Structural Reform Priorities