The Ifo institute - one of Germany's largest economic think-tanks - has revised down its forecast for German GDP growth for the current year to 0% from 0.4%. Commenting on its decision, the Ifo Institute stated that the German economy is stuck and is bobbing around in the doldrums, while other countries are feeling the upswing.
The forecast for 2025 has also been revised - the economy is now expected to expand by 0.9%, which is 0.6% lower than the previous forecast. Meanwhile, GDP is expected to grow by 1.5% in 2026.
As for the inflationary situation, the Ifo Institute predicts that CPI growth will slow to 2.2% in 2024 - from 5.9% in 2023 - and reach 2% in 2025. However, the economic institute warned that despite the decline in inflation, consumption is likely to remain weak.
The Ifo Institute also presented a forecast for the labor market, saying that the unemployment rate in Germany is likely to rise to 6.0% in 2024 from 5.7% in 2023, but then decrease to 5.8% in 2025 and to 5.3% in 2026.