Financial analysts have substantially adjusted their economic projections.
Experts have significantly reduced their economic predictions for Germany this year. Previously, they predicted a 0.7% increase in GDP, but in their latest report, they only expect a 0.2% rise.
The Council of Economic Experts, made up of five members led by chairwoman Monika Schnitzer, believes a 0.9% increase should suffice for next year. Compared to this, Germany's biggest economy experienced a 0.2% contraction in 2023.
Economist Martin Werding states that private households are still hesitant to spend, while industry and construction are only receiving a small number of new orders. However, German economic growth is expected to pick up steam in 2024, with domestic consumers driving the recovery. This is likely due to the fact that real incomes are expected to rise considerably. Inflation is also expected to drop, from an initial estimate of 2.4% in 2025, to 2.1%, and from 5.9% in 2023.
In addition, global trade and industrial production are expected to boost the German economy. Veronika Grimm, an expert, explains that German exports will benefit from increasing world trade this year and next. On the other hand, exporting companies face tough competition, higher labor costs, and constant increases in energy prices.
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Economists have revised their economic forecasts for the year, with a more pessimistic outlook. Despite the expected growth in 2024, economists still anticipate only a 0.2% increase in GDP for this year.
This year's economic predictions for Germany by economists have significantly decreased compared to earlier forecasts.
Source: www.ntv.de
