The institute says the German economy is “improving” and downgrading forecasts

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Germany’s leading economic research organization has sharply reduced its economic forecasts for the country in the coming year.

The Kiel Institute for the World Economy (IfW) spoke on Wednesday about the “crisis” of the economy from Germany and abroad.

“The German economy is struggling,” said Stefan Kooths, of the IFW.

The agency expects growth of just 0.1% this year. In autumn they thought that gross domestic product would increase by 1.3% in 2024. The agency has left the forecast for next year almost unchanged at 1.4%.

In 2023, the economic output of Europe’s largest economy fell by 0.3%. IfW experts say that the productivity in Germany has been “treading water.”

Private consumption has been weaker than expected, and exports have fallen despite the global economic recovery. The construction industry is also going through a rough patch.

Although the economy should start to recover by the end of the spring, the overall strength will not be very strong.

The agency also notes that “political uncertainty” continues to weigh on the company’s performance. The German government is currently struggling to complete the growth plan, with Finance Minister Christian Lindner and Finance Minister Robert Habeck each having their own, different views.

The German Chamber of Industry and Commerce says that the country’s economy is not doing well. Their Managing Director Martin Wansleben criticized the rising cost of electricity, and pointed to the “decrease in skilled jobs and international uncertainty that is affecting the export business.”

There is good news for consumers, experts say that they believe that part of the price of the highest prices since the middle of last year has passed. They expect consumer prices to rise by 2.3% this year and 1.8% next year.

Stefan Kooths, Kiel Institute for the World Economy (IfW Kiel), presents a brochure and a joint forecast of economic research institutions for the year 2024 at the Federal Press Conference.  Kay Nietfeld/dpa

Stefan Kooths, Kiel Institute for the World Economy (IfW Kiel), presents a brochure and a joint forecast of economic research institutions for the year 2024 at the Federal Press Conference. Kay Nietfeld/dpa

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