MNI BRIEF: 2023 German GDP Outlook Downgraded By Almost 1%
Joint Economic Forecast sees return to positive growth in 2024, with inflation falling to 2.6%
Germany's economy will shrink by 0.6% this year, according to the Joint Economic Forecast published on behalf of the Federal Ministry for Economic Affairs and Climate Action on Thursday, a downward revision of 0.9% from the spring forecast, before expanding by 1.3% for 2024 -- 0.2 percentage points below the previous assessment (see MNI INTERVIEW: Germany Faces 10-15Y Labour Shortage - Wise Man).
Headline inflation is expected to be 6.1% in 2023, falling to 2.6% in 2024, with core inflation standing at 6.1% and 3.1%, respectively. Unemployment is seen rising "moderately" to 2.6 million people in 2023. In the coming year the number of unemployed will probably decrease "somewhat."
"The most important reason for this revision is that industry and private consumption are recovering more slowly than we expected in spring," said Oliver Holtemöller, Vice President and Head of the Macroeconomics Department at the Halle Institute for Economic Research (IWH) .