DIHK lowers growth forecast for Germany’s economy to minus 0.2 from 0

(MENAFN) The German Chamber of Commerce and Industry (DIHK) has revised its growth forecast for Germany's economy, lowering it from 0 percent to minus 0.2 percent for 2024, citing a persistent structural crisis. In a statement released on Tuesday, the DIHK indicated that it also anticipates stagnation in the economy next year. Alarmingly, 31 percent of companies surveyed reported that they expect their business situations to worsen, a notable increase from the 26 percent who expressed similar concerns in the previous survey.

The DIHK highlighted that company investments have not yet recovered to pre-pandemic levels, with one-third of the surveyed companies indicating plans to reduce their investments. This trend could translate to a significant decrease of up to 40 percent in investments within industrial sectors. Factors contributing to this decline include inadequate investment, excessive bureaucracy, and high operational costs, which have hindered the German economy's competitiveness compared to other European nations and global counterparts.

Moreover, the statement revealed that some companies predict that the economic situation may deteriorate further than the projected zero growth for the upcoming year. This situation poses the risk of the German economy experiencing its third consecutive year without real growth in gross domestic product (GDP), a concerning trend for one of Europe's largest economies.

Germany's economic struggles are reminiscent of its experience during the coronavirus pandemic, which marked the first recession since 2009. Last year, the economy contracted by 0.3 percent year-on-year, and recent estimates from the ifo Institute were adjusted downward from a projected growth of 0.4 percent to zero growth, reflecting the ongoing challenges facing the nation.

MENAFN30102024000045015839ID1108833357