A new report predicts a dip in economic output this year, correcting earlier forecasts of moderate growth. But experts are optimistic for 2024.
Germany's economy is set to hit a slump in 2023, according to a report released by several leading economic research institutes on Thursday.
The Joint Economic Forecast, commissioned by the government and published twice a year, expects a downswing in Germany's gross domestic product (GDP) of 0.6% this year.
In their spring report, experts had predicted moderate economic growth 0.3%, but official numbers showed stagnation in the second quarter of 2023.
Why is Germany's economy shrinking?
Economists say skyrocketing energy prices in 2022 — linked to Russia's war in Ukraine — put a halt to post-pandemic economic recovery. This drove up inflation, meaning people could buy less with their money, and dampened industrial production.
"Industry and private consumption are recovering more slowly than we had expected in spring," said Oliver Holtemöller, vice president of the Halle Institute for Economic Research (IWH).
He added that businesses were also concerned by what they saw as political insecurity.
Source: DW
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