Economy Minister Robert Habeck said the government was making a “conservative” estimate, pointing to still-fragile supply chains, the effect of sanctions against Russia on the availability of raw materials and the ongoing effects of the coronavirus pandemic.
The 2.2% growth prediction assumes no energy embargo or blockade of gas deliveries, Habeck said. “If this came on top, we would have a recession in Germany,” he said.
Russian imports account for a significant, though declining, proportion of Germany’s supplies. Habeck said that proportion has declined from 55% before the war to 35% now.
Chancellor Olaf Scholz’s Cabinet on Wednesday approved a package of measures designed to ease the strain on consumers of higher energy prices. It includes lowering the tax on gasoline, cheap tickets for public transportation and one-off payments of several hundred euros to each taxpayer.
The cost to the public purse was estimated at “significantly more” than 30 billion euros ($32 billion), government spokesman Steffen Hebestreit told reporters.