IfW updated its growth forecasts for the German economy covering 2024-2025, which it shared in November 2023.
In the statement made by the Institute, it was stated that the gross domestic product growth forecast for Germany for this year was reduced from the previously announced 0.9 percent to 0.1 percent, while the 2025 growth forecast was left unchanged at 1.2 percent.
“Germany’s path out of recession will be protracted and a moderate recovery will only emerge after spring. Economic production will probably contract in the winter half of the year and will not move beyond stagnation with an increase of 0.1 percent in the whole of 2024,” the statement said.
Emphasizing that private consumption and exports are recovering later or less dynamically and investments are also extremely weak, the statement said that the inflation rate in the country is expected to fall below 2 percent this year and the federal government’s budget deficit is expected to be less than 0.8 percent.
“Employment is likely to increase slightly again this year before falling again as a result of demographic change,” the statement said.
