The economy Research institute predicts a decline in the German economy
The Kiel Institute for the World Economy (IfW) expects Germany's economic output to shrink this year. Gross domestic product (GDP) is likely to fall by 0.1 percent this year compared to the previous year.
04.09.2024, 12:13
SDA
Private consumption is weak, while industry and the construction sector are deeper in recession, according to the institute's fall forecast. In its summer forecast, the IfW had still expected growth of 0.2 percent. "Overall, the German economy is stuttering into an anaemic recovery, partly because economic policy is unable to set a reliable course," said Stefan Kooths, head of economic research at the IfW.
The institute forecasts that gross domestic product will increase again in 2025 and 2026. Next year, the Kiel Institute expects economic growth of 0.5 percent. Previously, however, 1.1 percent had been expected. According to an initial estimate, the increase in 2026 will be 1.1 percent.
IfW President: crisis is also structural in nature
"The German economy is increasingly facing a crisis that is not only cyclical but also structural in nature," said IfW President Moritz Schularick. The German government's budget cuts are weighing on the economy and the European Central Bank's turnaround on interest rates is coming too late.
According to Schularick, old core industries have not reacted to changes for too long. The asylum debate is poisoning the dialog on attracting skilled workers from abroad. "As long as this remains the case, we can watch our growth potential dwindle," he said.
