Germany slashes growth forecasts for 2024

21st Feb 2024 11:34

(Sharecast News) - Germany sharply lowered its economic forecasts on Wednesday, in response to faltering global demand and growing geopolitical uncertainty.

A government spokesperson told reporters that output was expected to grow by 0.2% in 2024, in sharp contrast to the last forecast, made in the autumn, for growth of 1.3%.

"The Germany economy is still in difficult waters," the spokesperson noted, pointing to still-high interest rates, weaker global demand and a growing number of geopolitical crises, including conflict in the Middle East and Ukraine.

Vice chancellor Robert Habeck, who is the federal minister for economic affairs, is due to publish the full economic report later on Wednesday, according to Reuters.

The report has, however, already been signed off by the cabinet, Reuters added.

Germany's economy, which is heavily reliant on manufacturing, shrank by 0.3% in 2023 and most economists expect it to enter a technical recession at the end of the first quarter.

Europe's largest economy, Germany has traditionally been a driver of growth for the Eurozone.

But it has been hit hard by surging energy costs in the wake of Russia's invasion of Ukraine, record levels of inflation, higher interest rates and weaker global demand.