Economic Growth Forecast for Germany Reduced by Experts due to Weakness

Germany’s economic situation is described as weak, with low domestic demand and high gas and electricity prices affecting exports. Five economic research institutes in the country have downgraded their GDP forecast, citing these factors as contributing to the prolonged period of economic weakness. Despite a potential recovery in the spring, experts suggest that the overall momentum might not be significant. The report emphasizes the importance of consumers’ purchasing power in improving the outlook.

The German economy was the worst performing major economy in the world last year, and this trend is expected to continue with a forecasted growth rate of just 0.1% for this year. One of the main factors affecting Germany’s economic performance is high energy prices, which have made energy-intensive goods less competitive in exports. Additionally, the government’s strict fiscal policy has limited its ability to issue new debt due to provisions for the constitutional debt brake.

The six-monthly “collective diagnosis” released by five economic research institutes in Germany revised their previous growth forecast from 1.3% to 0.1%. The report highlights structural factors and sluggish overall economic development as major contributors to Germany’s economic weakness. Despite some potential for recovery in spring, experts are cautious about the overall momentum and emphasize that consumers’ purchasing power will be crucial in improving Germany’s economic outlook.

By Aiden Johnson

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