Germany’s GDP to decrease by 0.5 percent in 2023

(MENAFN) Germany’s GDP is likely to decrease by 0.5 percent in 2023 as the EU’s biggest economy keeps on grappling with an energy catastrophe and increased interest rates, the IMK institute mentioned in a report on Tuesday.

The IMK’s estimates of 0.7 percent GDP expansion for 2024 is also mainly more negative than its spring expectation of 1.2 percent. Other German financial institutes such as the Ifo anticipate GDP expansion of 1.4 percent for next year.

“The German economy, weakened by energy price shocks, will not really get going in the coming months, because high interest rates and a subdued global economy are putting the brakes on,” the IMK declared.

The research expected that lowering inflation and better pay gains would cause private consumption to rebound from the end of the third quarter. "This positive development comes so late that it can only somewhat prevent the recession in 2023 as a whole, not mitigate it," the IMK stated.

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