The German economy is set for another downturn this year, leading economic institutes agree. Gross domestic product (GDP) will fall by 0.1 percent, Reuters reported today, citing informed sources. The institutes will publish their report on Thursday, but their figures may change a little before then. Germany’s economy contracted 0.3 percent last year and its performance was the weakest of any eurozone country.
Economic Overview
The German economy is the largest in Europe and many companies depend on it. Although inflation is slowing, consumption remains weak. High energy costs, weak global orders and high interest rates are still taking their toll.
The latest economic data from Germany painted a rather gloomy picture. Today’s survey showed that business sentiment there fell for the fourth consecutive month in September, and more than expected. It is also the lowest since the beginning of the year. Monday’s report showed that business activity fell at its steepest pace in seven months in September, suggesting a further decline in GDP.
Revised Growth Forecasts
The institutes also lowered their forecast for next years growth. They said GDP will increase by 0.8 percent next year, while they had previously projected growth of 1.4 percent. In 2026, the economy is now projected to grow by 1.3 per cent.
The German Ministry of Economics works with estimates from the Ifo, DIW, IWH, IfW and RWI institutes, which it then incorporates into its own forecasts. According to its latest forecast, the economy will grow by 0.3 percent this year. The ministry will publish an update to its outlook in October.
Source: čtk
