Germany, economy blocked and depressed in 2024
Germany’s economy is going through a period of stagnationas highlighted by recent estimates of the Ifo Institute which predict a growth of GDP equal to zero for the current year. Projections for 2025 have been scaled back to a 0.9% increase, a downward revision from the previous estimate of 1.5%.
A growth rate of 1.5% is expected only from 2026 onwards. Timo Wollmershaeuserhead of the Ifo forecasting department, described the German economic situation as stagnant and depressed. Germany is struggling with a double economic challenge: a structural crisis, characterised by insufficient investments especially in the manufacturing sector and by a productivity stagnant for yearsand a more immediate economic crisis, manifested by a drop in orders and an increase in purchasing power that does not translate into an increase in consumption, but rather into an accumulation of savings due to the prevailing uncertainty.
With regard to inflation and the unemploymentthe Ifo forecasts that the inflation rate in Germany will slowly decline from an average of 5.9% in 2023 to 2.2% this year, before falling to 2% in 2025 and 1.9% in 2026. unemployment rateinstead, is forecast at 6% for this year, compared to 5.7% in 2023, with an expected resumption of the decline starting next year: 5.8% in 2025 and 5.3% in 2026. Finally, the public deficit should stand at 2% this year, then reduce to 1.3% and 0.9% in the following two years.
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