• Wed. May 22nd, 2024

German Economy: GDP Forecast Cut to 0.1% Amid High Gas and Electricity Prices

BySamantha Jones

Mar 28, 2024
Economic Growth Forecast for Germany Reduced by Experts due to Weakness

In Germany, five economic research institutes have lowered their six-monthly GDP forecast from 1.3% to 0.1%, citing reasons such as high gas and electricity prices affecting exports and low domestic demand. The report emphasized the importance of consumers’ purchasing power in improving the economic outlook.

The German economy is struggling with prolonged economic weakness and dwindling growth forces. Structural factors and sluggish overall economic development were highlighted as contributing to this weakness. Despite a potential recovery in the spring, the report suggested that the overall momentum might not be significant.

One of the significant factors impacting Germany’s economy is the lack of increase in domestic demand, partly due to high gas and electricity prices. These prices have caused a loss of competitiveness for energy-intensive goods, which are a strength of Germany’s exports. Additionally, the government’s strict fiscal policy has limited new debt issuance due to provisions for the constitutional debt brake.

Germany’s economy was notably the worst performing major economy in the world last year. The forecast for next year predicts growth to pick up to 1.4%. The “diagnosis” was a collaborative effort from DIW in Berlin, IfW in Kiel, IWH in Halle, RWI in Essen, and Ifo in Munich.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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