Economic Growth Forecast for Germany Reduced by Experts due to Weakness

The German economy is facing a prolonged period of economic weakness and dwindling growth forces, according to experts. 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 factors impacting the German 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, as a result of provisions for the constitutional debt brake, has limited the issuance of new debt.

Five economic research institutes in Germany have downgraded their GDP forecast from 1.3% to 0.1%, citing reasons such as low domestic demand and high gas and electricity prices affecting exports. These institutes released their six-monthly “collective diagnosis” of the German economy, emphasizing the importance of consumers’ purchasing power in improving the economic outlook.

The report also noted that Germany’s economy was notably the worst performing major economy in the world last year. However, there is hope that growth will pick up to 1.4% in

By Riley Johnson

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