The country’s main economic institutes reduced their forecast for 2024; previously, an increase of 0.1% was estimated
Germany’s main economic institutes have cut their forecast for 2024 and now see Europe’s biggest economy shrinking by 0.1%, according to figures from the so-called Joint Economic Forecast. At the beginning of the year, the institutes had predicted a slight increase of 0.1%.
For 2025, growth of 0.8% is expected. At the beginning of the year, entities predicted an increase of 1.4%.
Germany’s economy was the weakest among its Eurozone peers in 2023, contracting by 0.3%.
Inflation is expected to fall to 2.2% this year – compared to 5.9% last year, said sources consulted by news agencies. Inflation would be around 2% – the target target of the European Central Bank in the following 2 years.
The Joint Economic Forecast is compiled twice a year by a group of think tanks German economic research, which includes the Ifo (Institute for Economic Research at the University of Munich), the IfW (Kiel Institute for the World Economy) and the DIW (German Institute for Economic Research).
The German Ministry of Economy incorporates these combined estimates into its own forecasts.
According to the latest estimate, the German government expected the economy to grow by 0.3% this year. An update is expected in October.
In recent years, Germany has had difficulty recovering from the effects of the pandemic and the war in Ukraine, with the subsequent rise in energy prices and rising inflation impacting growth.
The German government is planning a package to stimulate economic growth. However, the measures are not considered sufficient by business entities, who call for fundamental reforms and complain about high energy prices in international comparisons, excessive bureaucracy and a lack of qualified labor.
Deutsche Welle is Germany’s international broadcaster and produces independent journalism in 30 languages.
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