Germany cuts 2024 growth forecast as economic woes pile up

AFP - [email protected]
Germany cuts 2024 growth forecast as economic woes pile up
Dark clouds hover over the German Federal Bank in Frankfurt. Germany has cut its growth forecast as the country slides into recession. Photo: picture alliance/dpa | Lando Hass

The German government slashed its growth forecast for 2024 on Wednesday, warning that Europe's largest economy was in "difficult waters" as it faced a series of headwinds.


Output is now seen expanding by a mere 0.2 percent this year, government spokesman Steffen Hebestreit said at a Berlin press conference.

Last autumn, the government was still expecting 1.3 percent growth.

The country ended 2023 in recession, shrinking by 0.3 percent, and the latest data suggest the first quarter of 2024 will see another contraction.

"The German economy is still in difficult waters," Hebestreit told reporters.

High interest rates, weaker demand and "geopolitical crises" including conflicts in the Middle East and Ukraine were just some of the challenges confronting Germany, he added.

READ ALSO: Can Germany revive its struggling economy?

Economy Minister Robert Habeck will unveil details of the latest economic report later on Wednesday.

According to media reports, it will show that Germany risks facing anaemic growth up to 2028 if no action is taken.

'Perfect storm'

The German economy, Europe's largest and traditionally a driver of eurozone growth, is being buffeted by "a perfect storm", Habeck said earlier this month.

Having previously relied on cheap Russian gas imports, the sector is still reeling from the energy price surge triggered by Russia's invasion of Ukraine.


The European Central Bank's streak of interest rate hikes to tame inflation has added to the pain, dampening demand and investments.

Exports have slumped on weaker trading with key markets such as China, which increasingly produces its own goods. Geopolitical tensions including shipping disruptions in the Red Sea have added to trading woes.


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