Germany's Kiel Institute for the World Economy said the economy is expected to stagnate in 2025, after shrinking 0.3% in 2023 and a projected 0.2% decline in 2024.
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| The German economy is not expected to recover until 2025. (Source: Forexlive) |
The German economy is unable to escape stagnation, the institute's report said, adding that "there are currently few signs of a strong economic recovery".
Growth in 2026 was also revised down to 0.9% from the previous forecast of 1.1%.
The German Institute for Economic Research (DIW Berlin) also echoed this gloomy outlook, forecasting the German economy to grow by just 0.2% in 2025, down from its previous forecast.
However, growth is expected to pick up slightly to 1.2% in 2026, DIW said.
"We are facing a challenging combination of cyclical weakness and structural issues," said Geraldine Dany-Knedlik, head of economic forecasting at DIW.
She pointed out that rising energy and material costs, competition and potential US trade tariffs are major obstacles to German production and exports.
Meanwhile, expert Timo Wollmershaeuser, head of forecasting at the Ifo Institute for Economic Research (Germany), said that tight monetary policies in Europe and Germany's key export markets have caused a decline in industrial orders, continuing to put pressure on the economy.
However, there are still some positive signs as purchasing power has improved and inflationary pressures are expected to ease.
The Ifo Institute forecasts German inflation will fall to 2.3% in 2025 and 2.0% in 2026.
Source: https://baoquocte.vn/kinh-te-duc-van-chua-thoat-duoc-khong-khi-u-am-297257.html
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