Top economic institutes expect German economy to contract in 2024

Leading economic institutes now expect the German economy to contract in 2024, sources told dpa on Tuesday.

In an official report for the German Economy Ministry due to be published on Thursday, the group of influential organizations is to warn that gross domestic product (GDP) is likely to drop by 0.1% this year.

In the spring they had seen a marginal 0.1% increase.

The biannual study includes contributions from top think tanks such as the Munich-based ifo Institute and the German Institute for Economic Research (DIW).

Researchers do still expect German economic output to be positive in 2025, but the spring forecast of 1.4% growth for 2025 GDP has now been revised to 0.8% in the autumn report, sources said.

Europe's leading economy has been struggling in recent years to recover from the effects of the coronavirus pandemic and the Russian war in Ukraine, with the subsequent rise in energy prices and surge in inflation impacting growth.

Chancellor Olaf Scholz's coalition government is planning a package of measures to stimulate economic activity, but business groups complain the measures are insufficient and they want fundamental reforms. Their top complaints include: high energy prices, excessive bureaucracy and a shortage of skilled workers.