Inflation will be 8 per cent this year, the government projected.
The minister released the official autumn economic forecasts, which said its economy is set to register a growth of 1.4 per cent this year after having enjoyed a post-pandemic rebound earlier in the year.
The key reason for the downgrade from earlier forecasts was ‘the halt to Russian gas supplies’.
High energy prices are acting as ‘a brake on industrial production—above all in energy-intensive sectors’. The economy will return to growth with expansion of 2.3 per cent in 2024, the forecasts said.
The government recently unveiled a €200-billion fund to shield consumers and businesses from surging prices, including a cap on energy costs. Consumer prices would be much higher next year without that cap, the forecasts said.
Habeck, however, said he was ‘convinced’ that Russian President Vladimir Putin will "fail in this attempt to destabilise the basic economic and political order", according to global newswires.
ALCHEMPro News Desk (DS)
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