MNI BRIEF: Sharp Cut To German Growth Outlook - Joint Forecast
German GDP growth to slow significantly over 2024, according to German economic institutes' Spring Forecast
Five of Germany’s leading economic research institutes cut their 2024 joint growth forecast from 1.3% to 0.1% on Wednesday, citing cyclical and structural weaknesses, with the outlook for 2025 revised downwards by 0.1% to 1.4%.
Private consumption is expected to become the main force driving the economy, with wages expected to rise by 4.6% and 3.4% in nominal terms in 2024 and 2025 respectively and labour markets remaining tight.
Exports will make a greater contribution to GDP over the course of the year, with overall inflation seen at 2.3% in 2024 and 1.8% in 2025, and core inflation at 2.8% and 2.3%, respectively.
Meanwhile, ongoing uncertainty around economic policy continues to weigh on corporate investment, the report’s author’s said, with investment levels this year only equal to those seen in 2017.