Germany’s economic growth is set to be sluggish this year as inflation, high interest and weak exports continue to bite, economists have warned.
Europe’s largest economy could expand by just 0.1% over the course of 2024 as a result, a group of five think tanks said on Wednesday, compared to initial anticipations for growth of 1.3%.
“Cyclical and structural factors are overlapping in the sluggish overall economic development,” Kiel Institute for the World Economy head Stefan Kooths said.
“Although a recovery is likely to set in from the spring, the overall momentum will not be too strong.”
German gross domestic product (GDP) sank by 0.3% over the course of 2023, with the figure contracting by 0.2% over the final three months of the year.
Consumer inflation is indeed set to subside, with the think tanks forecasting an average of 2.3% over the year, compared to 5.9% in 2023.
Unemployment is set to marginally increase meanwhile, to a rate of 5.8% for 2024, against last year’s 5.7%.
“Economic output is currently at a level that is barely higher than before the pandemic. Since then, productivity in Germany has been at a standstill,” the report said.