German Economy Sluggish, Recovery Expected in 2025 (Report)
The German economy remains entrenched in stagnation and is expected to deteriorate further throughout the year, according to a report released on Tuesday by the Macroeconomic Policy Institute (IMK).
The IMK indicates that the German economy has experienced stagnation for several years, with only a modest recovery projected for next year. The institute forecasts that Germany’s gross domestic product will grow by a mere 0.4% this year, but anticipates an acceleration of growth to 1.1% in the following year.
The report highlights that private consumption, driven by rising real wages and enhanced consumer confidence, will be pivotal in supporting the economic recovery. Moreover, exports and investments in equipment are expected to make positive contributions to this rebound.
In terms of inflation, the IMK report aligns with projections from the European Central Bank, predicting a consumer price increase of 2.3% this year, followed by a rise of 2% next year. Earlier this month, a report from the German central bank also confirmed the persistent weakness of Europe’s second-largest economy.
