Germany's economic advisers said that given reports of a revision of economic forecasts by the German government, they also plan to revise their estimates of GDP growth for the current year. The last forecast of the advisers, presented in November, assumed an expansion of the economy by 0.7% this year. The next official update is due in mid-May.
Last week, sources reported that the German government in its annual economic report (to be released today) will reduce the GDP growth forecast for 2024 by 1.1%, to 0.2%.
For 2025, the government expects the economy to grow by 1%, down from its previous forecast of 1.5%. The government also expects inflation to fall to 2.8% this year and be at 1.9% in 2025. The gloomy outlook for the German economy in 2024 came after the country's economy contracted by 0.3% in 2023 under pressure from high inflation, rising interest rates and a weak global economy. Both the Ifo and IfW economic institutes also lowered their most recent 2024 forecasts. Ifo is now predicting economic growth of 0.7%, from a previous 0.9%, and the IfW is forecasting 0.9% from 1.3% earlier. They plan to present new forecasts in March.