FRANKFURT (AFP) – The German economy is expected to barely grow this year, leading economic institutes said yesterday, as weak demand at home and abroad slows the path to recovery.
Europe’s largest economy will expand by just 0.1 per cent in 2024, five think-tanks said in a joint statement, a sharp downgrade from their earlier forecast of 1.3 per cent growth.
“Cyclical and structural factors are overlapping in the sluggish overall economic development,” said Stefan Kooths from the Kiel Institute for the World Economy (IfW Kiel).
“Although a recovery is likely to set in from the spring, the overall momentum will not be too strong,” he added.
The German economy shrank by 0.3 per cent last year, battered by inflation, high interest rates and cooling exports, and is struggling to emerge from the doldrums.
Consumer spending was picking up “later and less dynamically” than previously forecast as wages lag behind.
Germany’s export sector, usually a key driver of economic growth, was suffering from cooling foreign trade against a fragile global economic backdrop.
