However, since the current economic situation is not so good yet, think about it. “I get the impression that business leaders and entrepreneurs are more confident than they actually feel that things are getting better.”
According to Brzeski, it is evident that looking at the concrete numbers, for example, orders in the industrial sector have been declining since February. “There are still a lot of old assignments in the books during the lockdowns, but the new assignments have been very disappointing,” he continues. ‘You also see that production in energy-intensive sectors is down 13%. So it’s not going so well yet.’
Higher energy prices
It also notes that consumers are gradually confronting higher energy prices. “But on January 1, there will be another increase in gas and electricity prices, about 60 to 70 percent.”
However, Germans appear to remain positive, despite high inflation. Brzeski: ‘I think we’ve hit rock bottom. The post-summer decline in economic confidence has come to a halt. The government is doing a lot – not just in Germany, but across Europe – to accommodate the economy. This also helps for business confidence. However, the big question now is whether this is a traditional recovery of the economy or whether it is more about the search for a low and whether we will see very moderate economic growth in 2023. And I fear the latter.’
Slight recession
A harsh reality, according to Brzeski. “We can’t make numbers prettier than they are,” he continues. ‘The reality is that – if you look at the forecasts – Germany is entering a small recession. We will certainly notice this in the Netherlands, because Germany has been hit the hardest by high energy prices and world trade problems. And I think Germany’s overall business model has been affected more than other European economies by everything that’s happening right now.’