Germany’s Economy Faces Sluggish Growth as Five Major Economic Research Institutes Revise Outlook from 1.3% to 0.1%

Economic Growth in Germany Hindered by Experts.

In recent news, five of Germany’s top economic research institutes have downgraded their GDP outlook for the country. This revision was attributed to a combination of low domestic demand and high energy prices affecting exports. The report by the group of leading economic think tanks revised their previous growth forecast from 1.3% to just 0.1%. They emphasized the importance of consumer purchasing power in improving the economic outlook.

The report also noted that Germany’s economy is showing signs of weakness, with declining growth forces and overlapping economic and structural factors contributing to sluggish overall economic development. While a recovery is expected to begin in the spring, experts cautioned that the momentum may not be significant. Additionally, Germany’s economy is facing challenges due to a sharp tightening of fiscal policy by the government in preparation for the return of the constitutional debt brake, which restricts the issuance of new debt. As a result, Germany was the worst-performing major economy in the world last year. However, projections for next year anticipate growth picking up to 1.4%.

This “diagnosis” was compiled by five prominent German economic research institutes, including DIW in Berlin, IfW in Kiel, IWH in Halle, RWI in Essen and Ifo in Munich.

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