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IFO Upwardly Revises 2024 Growth Forecast by 0.2pp to +0.4% Y/Y

GERMANY
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The IFO institute has revised its 2024 German real GDP forecast by +0.2pp to +0.4% Y/Y. They leave their 2025 forecast at +1.5% Y/Y.

  • IFO sees strengthening purchasing power of households and consumer spending normalizing. Additionally, they expect the external sector to further recover particularly starting in the second half of 2024.
  • This should yield a gradual recovery in investment, they add, "supported by the gradual easing of monetary policy", anticipating two further ECB rate cuts this year.
  • The forecast broadly matches MNI's collation of sellside analysts, which projects German real GDP growth at -0.1% Y/Y in Q2, +0.1% in Q3, and +0.9% in Q4. Q2 and Q3 estimates were largely unrevised recently, while the Q4 estimate was upwardly revised by +0.4pp during the last three months.
  • Elsewhere, IFO projects headline inflation at 2.2% in 2024 (-0.1pp revision) and at 1.7% in 2024 (+0.1pp revision).
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The IFO institute has revised its 2024 German real GDP forecast by +0.2pp to +0.4% Y/Y. They leave their 2025 forecast at +1.5% Y/Y.

  • IFO sees strengthening purchasing power of households and consumer spending normalizing. Additionally, they expect the external sector to further recover particularly starting in the second half of 2024.
  • This should yield a gradual recovery in investment, they add, "supported by the gradual easing of monetary policy", anticipating two further ECB rate cuts this year.
  • The forecast broadly matches MNI's collation of sellside analysts, which projects German real GDP growth at -0.1% Y/Y in Q2, +0.1% in Q3, and +0.9% in Q4. Q2 and Q3 estimates were largely unrevised recently, while the Q4 estimate was upwardly revised by +0.4pp during the last three months.
  • Elsewhere, IFO projects headline inflation at 2.2% in 2024 (-0.1pp revision) and at 1.7% in 2024 (+0.1pp revision).