June 13, 2024

Germany’s Economy Slows Down: IfW Revises Growth Forecast to 0.1%

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Institute Decreases Forecasts for German Economy Due to Struggle

The German economy is facing significant challenges, as the Kiel Institute for the World Economy (IfW) has revised its economic forecast. According to Stefan Kooths of the IfW, the German economy is expected to grow only 0.1% this year, a significant decrease from previous expectations of 1.3%. This slow growth can be attributed to a number of factors, including slower private consumption, declining exports despite global economic growth, and a struggling construction industry.

Despite some concerns about political uncertainty affecting the economy, experts predict that high energy costs and a shortage of skilled labor will have a more significant impact on export business in Germany. Additionally, geopolitical uncertainties may continue to impact Germany’s export business.

One positive aspect of this forecast is that it is predicted that the phase of very high inflation rates experienced since the middle of last year may be over. Consumer prices are expected to rise by 2.3% this year and by 1.8% next year, providing some relief for consumers who have been experiencing rising prices. Despite these challenges, the institute has left its forecast for next year virtually unchanged at 1.4%.

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