June 13, 2024 12:13 am
Economic growth for Germany cut by experts

Economic research institutes in Germany have lowered the country’s GDP forecast due to factors such as high gas and electricity prices impacting exports. These leading economic think tanks issued their biannual “collective diagnosis” of the German economy, revising their previous growth forecast from 1.3% to just 0.1%. The report highlighted the importance of consumer purchasing power in improving the economic outlook.

The German economy is experiencing weakness with growth forces dwindling, according to experts who compiled a collaborative report by five economic research institutes in Germany. Economic and structural factors are contributing to sluggish overall economic development, with domestic demand not rising as projected partly due to high energy prices making energy-intensive goods less competitive, despite being a strength of the German economy.

Another factor affecting the German economy is the government’s strict fiscal policy, which is preparing to adhere to the constitutional debt brake regulations limiting new debt issuance. As a result, Germany had the lowest-performing major economy worldwide last year. Nonetheless, growth is expected to improve in the coming year, with a forecast predicting a 1.4% increase. The collaborative report was compiled by the DIW in Berlin, the IfW in Kiel, the IWH in Halle, the RWI in Essen, and the Ifo in Munich.

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