Germany downgrades economic forecast
Germany’s gross domestic product (GDP) is expected to decline by 0.2% in 2024, representing a sharp downgrade from a previously projected 0.3% expansion, Berlin's ministry for economic affairs has announced.
According to a ministry revision published on Wednesday, 2024 will mark the second straight year of recession in the EU’s economic powerhouse after last year’s contraction of 0.3%.
Early indicators such as industrial production and business climate suggest the economic downturn has continued into the second half of 2024, the ministry noted.
The German economy hasn’t seen powerful growth since 2018 as the country’s structural problems have been amplified by wider global challenges, economy minister Robert Habeck said in a statement.
“Germany’s structural problems are now taking their toll. In the middle of the crises, Germany and Europe are squeezed between China and the US, and must learn to assert themselves,” Habeck said, as quoted by media outlets.
For 2025, the minister expects GDP to increase by 1.1%, slightly more than the government’s previous prediction of 1%. “Germany is a country full of strengths,” Habeck stated, adding that if the government’s support measures are “fully implemented, then the economy will grow more strongly and more people will find employment again.”
Meanwhile, German Finance Minister Christian Lindner denounced the government’s economic policy, telling DPA news agency: “Our economy has been shackled for years by bureaucracy and the tax burden, but – frankly – also by centrally planned economic measures to fight climate change and an increasing policy of redistribution.”
The Eurozone’s largest economy has been falling behind its peers over the past years, largely due to a prolonged manufacturing downturn. Germany’s was the only Group of Seven economy to contract in 2023.
