Germany’s Economic Woes Deepen: Back-to-Back Years of Contraction Loom on the Horizon

Private think tank lowers growth forecast for this year to -0.1%

(Berlin = Yonhap News) Correspondent Kim Gye-yeon = Academics predict that the German economy will record negative growth this year for the second consecutive year following last year.

According to the business magazine Handelsblatt on the 27th (local time), five think tanks, including the German Institute for Economic Research (DIW), Kiel Institute for World Economic Studies (IfW), and Halle Institute for Economic Research (IWH), predicted this year’s economic growth rate in a joint economic outlook released the previous day. The forecast was lowered from 0.1% to -0.1%.

The forecast for next year was also lowered from 1.4% to 0.8%.

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They predicted that the economic stimulus program through which the federal government will invest 110 billion euros (about 161 trillion won) over two years until next year will not have a significant effect.

“The problems of the German economy are very fundamental compared to the size of the growth budget,” said IWH Deputy Director Oliver Holtemöller.

When the German government announced the draft budget for next year last July, it announced that it would increase next year’s economic growth rate by 0.5% through an economic stimulus program.

The German government plans to update its economic outlook early next month, referring to analyzes by private research institutes. The government’s existing economic growth rate forecast is 0.3% this year and 1.0% next year.

On the 25th, the Organization for Economic Cooperation and Development (OECD) also lowered its forecast for Germany’s economic growth rate for this year from 0.2% to 0.1% and for next year from 1.1% to 1.0%. The forecast for next year is the lowest among the 20 major countries (G20).

dada@yna.co.kr

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2024/09/27 17:53 Sent