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German economy expected to flatline this year - economists

Published 27/03/2024, 11:32
© Reuters.  German economy expected to flatline this year - economists

Proactive Investors - 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.

Read more on Proactive Investors UK

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