International Monetary Fund predicts no economic expansion in Germany in the year 2024.
The IMF is diminishing its forecasted growth rates due to various economic uncertainties worldwide. This affects major European economies like Germany and France, with Germany presently in a better position compared to the Federal Republic. Surprisingly, one significant EU nation is thriving.
The IMF has decreased its 2024 growth projection for Germany by 0.2%, now predicting a flatlining economy. For 2025, it has also reduced the forecast by 0.5%, estimating a 0.8% growth rate. Originally, analysts predicted a 0.9% growth for Germany in 2024. However, their assumptions have progressively weakened as the year unfolds, anticipating a further decline.
IMF revises Eurozone expectations
Similarly, the IMF has moderately adjusted its expectations for the Eurozone in 2024. In contrast, it predicts a growth rate of 1.2% for 2025, which is 0.3% less than it anticipated in July, largely due to Germany's struggling economy and France's poor performance.
The second largest Eurozone economy is projected to achieve a stable growth rate of 1.1% in 2024, surpassing the July forecast by 0.2%. However, for 2025, the IMF has lowered its French growth estimate by 0.2%, predicting a growth rate of 1.1%. Just like Germany, Italy is also grappling with an ongoing industrial weakness, as per experts.
Spain's booming economy
On a positive note, Spain is dominating with a 2.9% growth rate in 2024, largely due to its flourishing tourism sector. This is a 0.5% increase compared to the IMF's July forecast. For 2025, Spain is also expected to showcase a growth rate of 2.1%, significantly higher than Germany's forecast.
Global growth at 3.2%
Maintaining a 3.2% growth rate for 2024, the IMF has kept its projection for global growth at a relatively weak level. However, it has modified its expectations for 2025 to the same level, citing numerous geopolitical and economic threats, according to Chief Economist Pierre-Olivier Gourinchas. While the global economy was formerly considered stable in April and July, "we now believe that risks could potentially impact the economy," he stated.
Despite the IMF lowering its growth projections for major European economies due to global economic uncertainties, Spain's economy continues to shine, with a projected 2.9% growth rate in 2024. On the contrary, the world economy, including Germany and France, is projected to grow at a relatively weak 3.2% in 2024, as highlighted by the IMF's Chief Economist.
