Its top economic institutes said today (27.3.2024) that they expect the country’s economy to grow at a rate of 0.1% in 2024, reviewing their previous forecast of 1.3%, as higher interest rates, weak global demand and political uncertainty hit the hopes of stronger . Germany’s institutes now predict that gross domestic product will increase by 1.4% in 2025, compared with 1.5% that was the previous estimate. “Although an economic recovery has been possible since spring, overall dynamics will not be particularly strong,” Stefan Kouts, head of economic research at the Kiel Institute for the global economy, said. Economic growth is currently marginally higher than the period prior to the pandemic, as productivity in Germany has remained stagnant since then, the institutes reported in a report on their six-month, common, economic forecasts. “Recently there have been more opposing than favorable winds in domestic and foreign economies,” the study said. In the current year, private consumption will become the most important driving force for the economy, followed by the strongest exports the following year, institutes reported. Private consumption is expected to benefit from lower inflation – inflation in Germany is expected to decline to 2.3% in 2024 and 1.8% in 2025. A robust labour market will also support consumption, according to the institutes. Unemployment will likely increase marginally and then decrease again, from spring onwards. During the year, the unemployment rate is likely to be 5.8% and fall to 5.5% the following year.
Germany: Review Down Their Forecasts and Growth Think-tank s
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