The Bundesbank estimates that in 2024, Germany’s gross domestic product will grow by 0.4 percent, compared to a 1.2 percent growth from the previous forecast, while for 2023, it expects a decline in economic activity of 0.1 percent, whereas in the previous estimate from June, a decline of 0.3 percent was predicted.
– The German economy will recover in the coming years – stated the German central bank.
The Bundesbank expects somewhat stronger growth in the medium term – 1.2 percent in 2025 and 1.3 percent in 2026.
However, the economic recovery will be delayed, as indicated by short-term prospects.
Currently weak foreign demand represents the main brake on growth. In addition, household consumption is uncertain, and higher financing costs are slowing down investments.
However, the Bundesbank expects an improvement soon.
– From the beginning of 2024, the German economy should return to a path of expansion and should gradually accelerate – said Bundesbank President Joachim Nagel.
Inflation also shows signs of improvement and is expected to more than halve its rate in 2024.
Specifically, the Bundesbank expects that the inflation rate calculated according to the harmonized index of consumer prices (HICP) will be 6.1 percent this year and 2.7 percent next year. In the June estimate, the expected rates were 6 and 3.1 percent, respectively.
