The economic forecasts for Germany continue to darken. Economists expect at best mini-growth in 2024. Picture Alliance
The forecasts for the German economy are becoming even more pessimistic. Now the International Monetary Fund (IMF) has also lowered its outlook for this year to a mini-growth of 0.2 percent.
By 2023, German gross domestic product had already shrunk by 0.3 percent. The start of the new year was also weak. The country is in recession. There is hardly any recovery in sight. Instead, there is a risk of stagnation.
Here is an overview of the most important forecasts for German economic growth in 2024 and 2025.
The economic forecasts for Germany are poor – and have recently become even more pessimistic. Now the International Monetary Fund has also lowered its outlook. The IMF only expects the German economy to grow by 0.2 percent this year and a recovery of 1.3 percent in 2025. Shortly before Easter they already had leading economic institutes their forecast cut their forecast to a mini-growth of 0.1 percent. Some economists even expect German economic output to shrink again in 2024.
In the fall, the institutes had predicted growth of 1.3 percent for 2024. This shows how quickly the economic forecasts still change. This reflects the uncertainty resulting from the wars in Ukraine and Israel, but also about China’s economy. In addition, the debt judgment of the Constitutional Court, the federal government’s budget decisions and the unclear costs of the energy transition are leaving their mark.
All economic forecasts for Germany
Our table shows all the relevant forecasts for the economy in Germany for 2024 and 2025. They come from the government, international organizations, Institutes, banks and associations. The forecasts refer to the change in gross domestic product (GDP) compared to the previous year.
The arrows show in which direction the forecasts were last corrected. You can sort all columns using the top field. The forecasts for the economy are currently turning downwards.
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The German economy was hit particularly hard by the consequences of the Russian attack on Ukraine. High energy prices caused inflation to skyrocket in Germany. Added to this is the weakness of the global economy, China and thus German exports. The distortions go beyond the economy. Germany’s business model as an export-oriented country, with cheap energy from Russia and strong sales markets in China, is in question. The economic forecasts are therefore likely to remain volatile.
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It is positive that the labor market in Germany remains stable. At the same time, wages and salaries are rising faster than prices for the first time in over two years. The purchasing power of incomes therefore increases. This should support private consumption and thus the economy. Also because inflation has fallen significantly recently. This means that interest rate cuts from the European Central Bank are coming into view, which could support the economy. Economists therefore expect small growth of just over one percent for the coming year.
Economists speak of a recession when a country’s economic output declines in two quarters in a row. In Germany, GDP fell by 0.3 percent in the fourth quarter of 2024. Economists, including those from the Ifo Institute, also expect a further decline in the first quarter of 2024. Germany would have fallen back into a technical recession.
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