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The Ifo institute now expects German production to increase by just 0.2% in 2024, after previously forecasting 0.7%.
Germany is stuck in a “winter recession” and growth in 2024 will be weaker than feared, two of its top forecasters say.
The Ifo institute now expects output to rise by just 0.2 percent, having previously forecast 0.7 percent, while the IfW Kiel institute cut its forecast from 0.9 percent to 0.1 percent.
“The economy is paralyzed,” said Ifo’s head of forecasts, Timo Wollmershaeuser.
And he added: ‘If we look at the surveys carried out among companies and households, we realize that the mood is bad and uncertainty is high.
Moderate consumption, high interest rates and price increases, government austerity measures and the weak global economy are currently holding back the economy in Germany and causing another winter recession.’
The German economy contracted 0.3 percent in the last three months of 2023 and is expected to contract again in the first quarter, according to Wollmershaeuser.
Two consecutive quarters of production decline are defined as a technical recession.