Germany does not finish taking off. He Bundesbank has just updated its economic forecasts for the country and predicts a drop in GDP of 0.2% this year, to return to growth with 0.2% in 2025. A worsening that causes the German country to have two consecutive years of recession.
The German central bank has worsened both estimates, given that in June it predicted growth of 0.3% for 2024 and 1.1% for 2025, as reported by Ep. Second consecutive year of decline since -0.3% was recorded in 2023. Likewise, GDP would expand by 0.8% in 2026, six tenths less, to accelerate by one tenth in 2027.
“The German economy is not only facing headwinds, but also structural problems,” summarized the president of the Bundesbank, Joachim Nagel, as stated by the aforementioned agency. The published report reveals that industry, exports and investment have been especially affected. “The labor market is also now responding in an important way to the prolonged weakness in economic activity,” said Nagel, who added that this circumstance is weighing on private consumption. In this sense, although consumption will increase constantly, it will do so less intensely than expected, in part due to the difficulties arising from employment. Exports are expected to grow “gradually.”
Nagel has also pointed out that, currently, the greatest factor of uncertainty for Germany comes from protectionist trends worldwide, read the tariff plan defended in the campaign by the president-elect of the United States, donald trump.
On the inflation side, the Bundesbank has anticipated that it will decline “slightly” despite the sluggishness of demand. Thus, harmonized inflation, the one used by Eurostat for its statistics, will close this year at 2.5% and will only fall one tenth by 2025. The index will register readings of 2.1% in 2026 and 1.9% in 2027.
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