This came in the institute’s “Autumn Forecast” report, where it again expected that Germany’s economy, the largest in Europe, would shrink by 0.1 percent this year as a whole, after a 0.3 percent decline last year.
The institute said that this contraction will not be limited to the current year, but will continue in the next two years, expecting a contraction of 0.5 percent in 2025 and a greater contraction of 1.1 percent in 2026, and about the unemployment rate.
The report added that it is expected to rise from 57 percent last year to 6 percent this year and to 6.1 percent next year, but it will decline again in 2026 to 5.9 percent.
He also added that the inflation rate will decrease from 5.9 percent last year to 2.2 percent this year, and to 20 percent in the next two years.
The director of the institute, Moritz Schularick, confirmed, according to the report, that the German economy is slipping “more and more into a crisis, not only for reasons related to growth, but also for reasons of a structural nature,” pointing to “government cuts and the delay in raising interest rates by the European Central Bank.”
Schularek said that key economic sectors had “for a long time stood in the way of change and the asylum debate had a negative impact on the policy of attracting skilled workers from abroad,” adding that “as long as these reasons remain before us, we will continue to watch how our country’s economy declines.”
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