- Anticipates a decrease in overall financial production in 2024, according to IfW.
The Global Economic institute (GEI) anticipates that Germany's economic production will decrease this year. The national output, represented by the GDP, is predicted to decrease by 0.1% compared to the previous year, as per the autumn projection by the institute situated in Kiel. Consumption by private entities is faltering, and both industry and construction sectors are experiencing a deeper downturn.
In its summer forecast, the institute had predicted a growth rate of 0.2%. "In essence, Germany's economy is limping towards a colorless recovery, due to the fact that economic policies lack clarity," stated GEI's chief economist Stefan Kooths.
GEI predicts that the GDP will show an increase once again in 2025 and 2026. In the following year, GEI Kiel anticipates a growth rate of 0.5%; the previous expectation was 1.1%. For 2026, an increase of 1.1% is expected.
GEI President: Crisis has a structural nature
"Germany's economy is increasingly facing a crisis that isn't merely cyclical, but also structural," stated GEI President Moritz Schularick. The federal government's financial cutbacks are affecting the economy, and the European Central Bank's interest rate reversal is coming too late.
Schularick mentioned that traditional main industries are reacting too slowly to changes. The asylum debate is contaminating the discourse around attracting foreign skilled workers. "So long as this continues, we can observe as our growth potential decreases progressively," he said.
The Global Economic institute (GEI) recognizes the necessity of implementing changes within the Economic and Monetary Union to address Germany's structural economic issues. Despite the challenges, GEI President Moritz Schularick believes that a robust Economic and Monetary Union could provide the necessary support for Germany to overcome its current crisis.
