(ANSA-AFP) - FRANKFURT AM MAIN, MAR 27 - The German economy
is expected to barely grow this year, leading economic
institutes said Wednesday, as weak demand at home and abroad
slows the path to recovery. Europe's largest economy will expand
by just 0.1 percent in 2024, five think-tanks said in a joint
statement, a sharp downgrade from their earlier forecast of 1.3
percent growth.
"Cyclical and structural factors are overlapping in the
sluggish overall economic development," said Stefan Kooths from
the Kiel Institute for the World Economy (IfW Kiel). "Although a
recovery is likely to set in from the spring, the overall
momentum will not be too strong," he added.
The German economy shrank by 0.3 percent last year, battered
by inflation, high interest rates and cooling exports, and is
struggling to emerge from the doldrums. Even though inflation
has steadily dropped in recent months, consumer spending was
picking up "later and less dynamically" than previously forecast
as wages lag behind, the institutes (DIW, Ifo, IfW Kiel, IWH and
RWI) said. And Germany's export sector, usually a key driver of
economic growth, was suffering from cooling foreign trade
against a fragile global economic backdrop. Energy-intensive
businesses in particular have been hit hard by soaring energy
prices following Russia's war in Ukraine, contributing to a
manufacturing slump in Europe's industrial powerhouse.
(ANSA-AFP).
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