German finance minister calls for structural reforms to exit economic ‘misery’

WASHINGTON (Reuters) – German Finance Minister Christian Lindner said on Wednesday that structural reforms were necessary in Germany and expressed disappointment at weak economic growth in Europe’s largest economy.

The German economy is expected to grow less than previously expected in 2024 and 2025 amid persistently weak consumer sentiment, according to the latest forecasts from the International Monetary Fund, published on Tuesday.

In its World Economic Outlook, the IMF cut its forecasts for German gross domestic product by 0.3 percentage points for both years, expecting 0.2% growth this year and 1.3% in 2025.

“We need structural reforms to get out of the misery,” Lindner said at a panel discussion at the sidelines of the International Monetary Fund spring meeting in Washington.

Lindner said reforms were needed to increase competitiveness, reduce bureaucracy and lower taxes.

Europe’s economic powerhouse has been struggling to grow due to high interest rates, weak global demand and political uncertainty. Although inflation and energy prices are expected to ease this year, growth is forecast to remain extremely weak.

The minister said his fiscal policy is taking inflation in the right direction, even when “people complain about my moderate, restrictive budget policies.”

“In Germany, we are heading towards the 2% inflation rate,” Lindner said. “This is very good news for the German economy and for the private households.”

Inflation in Germany slackened to 2.3% in March helped by lower food and energy prices.