Updated January 16th, 2024 at 15:51 IST
Concerns rise as Germany trails behind with 0.3% forecasted growth
Germany's BDI expects a minimal 0.3% economic growth in 2024, raising concerns as the global economy forecasts a robust 2.9% expansion.
Bleak German outlook: The German BDI industry association revealed on Tuesday that it anticipates a meagre 0.3 per cent growth for the German economy in 2024, in stark contrast to its forecast of a 2.9 per cent expansion in the global economy. BDI President Siegfried Russwurm expressed concern, stating that Germany's economic standstill puts the country at a further disadvantage compared to other major industrialised nations.
Russwurm emphasised a lack of prospects for a swift recovery in 2024, citing the persistent challenges such as inflation, soaring energy prices, and weakened foreign demand that led to a 0.3 per cent contraction in the German economy in 2023, as reported by the federal statistics office on Monday.
According to Russwurm, the difficulties faced by the economy in the previous year have not diminished; instead, they have intensified, making 2024 another challenging year. The BDI attributes the anticipated modest growth to a rebound in consumption as inflation subsides. However, the industry association is sceptical about a genuine recovery in German industry, especially in energy-intensive sectors grappling with high electricity prices. Siegfried highlighted that industrial production has yet to reach the pre-crisis levels of the last quarter of 2019, suggesting a stagnant trend in 2024.
The BDI's grim outlook aligns with other institutions, as three prominent German economic institutes had already revised their 2024 growth forecasts downward in December. Ifo, RWI, and DIW lowered their predictions to 0.9 per cent, 0.8 per cent, and 0.6 per cent, respectively, citing concerns about the economic trajectory of the Eurozone's largest economy. The collective sentiment amongst these institutions reflects a cautious outlook for Germany's economic prospects in the coming year.
(With Reuters Inputs)
Published January 16th, 2024 at 15:51 IST
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