A source with knowledge of the matter says that Germany’s federal government will significantly reduce its forecast for growth in the German economy to just 0.2% in a report due to be released next week. This figure is a significant drop from October’s forecast of 1.3%. Factors contributing to this depressed figure include low growth in the global economy and a German constitutional court ruling that blew a hole in the country’s budget.
The gloomy prospects for Germany’s economy in 2024 come after the country’s GDP shrank by 0.3% in 2023 under the pressure of high inflation, rising interest rates, and a weak global economy. The German business association BDI also issued a similarly low forecast in mid-January for growth of 0.3%, warning that the economy was at a “standstill”.
An economy ministry spokesperson said they could not comment on the numbers, adding that the government would provide comment when the official report was published. Germany’s finance minister Christian Lindner said on Sunday that the coalition government planned to present a concept to strengthen Germany’s position as an industrial location this spring, after multiple warnings from both him and Economy Minister Robert Habeck that the country was losing its competitiveness on a global scale.