Economic forecast: Germany set to enter recession in 2023
September 30, 2022, 10:25 am

Economic forecast: Germany set to enter recession in 2023

Flag of Germany (File photo: Pixabay)

Germany is set to enter a recession in 2023, with a decline in gross domestic product (GDP) of 0.4 per cent, according to a joint forecast published by leading economic institutes in the country, according to the We For News.

In the spring, the institutes were still predicting that Europe’s largest economy would grow by 3.1 per cent, reports Xinhua news agency.

However, the new forecast “mainly reflects the extent of the energy crisis”, according to the forecast published on Thursday by RWI Leibniz Institute for Economic Research, the Halle Institute for Economic Research (IWH), the Kiel Institute for the World Economy, and the ifo Institute.

A “significant part” of Germany’s gas supply has been lost since the start of the Russia-Ukraine war, increasing the risk that “remaining supply and storage volumes will not be sufficient to meet demand during the coming winter”.

Gas prices in Europe have tripled, since Russian supplies to Germany via the Nord Stream 1 pipeline have been repeatedly reduced, and finally stopped altogether.

Germany is set to enter a recession in 2023, with a decline in gross domestic product (GDP) of 0.4 per cent, according to a joint forecast published by leading economic institutes in the country - Photo. Pixabay

After explosions caused four major gas leaks at both Nord Stream 1 and 2, the situation is unlikely to resolve quickly.

To secure its supply, Germany has been seeking new trade partners, and is also ramping up its use of coal and nuclear power.

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Despite the planned nuclear phase-out at the end of the year, Minister for Economic Affairs Robert Habeck has retained the option of operating two nuclear power plants in the first quarter of 2023.

Driven by skyrocketing energy prices, inflation in Germany jumped to a new record of 10 percent in September, according to preliminary data from the Federal Statistical Office (Destatis).

Rising producer prices and continuing supply chain interruptions caused by the Covid-19 pandemic have further fuelled consumer prices.

Inflation in Germany is expected to rise even further in the coming months, before averaging 8.8 per cent next year, according to the joint forecast.

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The European Central Bank’s target inflation of around 2 per cent will not be reached before 2024.

“Although the situation is expected to ease somewhat over the medium term, gas prices are likely to remain well above pre-crisis levels,” the institutes said, warning that “this will mean a permanent loss of prosperity for Germany”.

Source: wefornews

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.