Research institutions slash Germany's 2024 GDP forecast down to 0.1 pct

BERLIN, March 27 (Xinhua) -- Germany's leading economic research institutions on Wednesday slashed their 2024 economic growth forecast for the country down to 0.1 percent - a sharp decrease from the 1.3 percent growth projected in the fall of 2023.

"The economy in Germany is struggling," highlights the joint forecast by five institutions, including the German Institute for Economic Research, the ifo Institute for Economic Research, and the Kiel Institute for the World Economy (IfW Kiel).

Stefan Kooths, an economist at the IfW Kiel, emphasized that while recovery from last year's 0.3 percent recession is expected to commence in spring, the overall momentum will not be too strong. He cited cyclical and structural issues contributing to Germany's slow economic progress.

The report suggests that private consumption will be the primary driver of economic growth this year, with inflation expected to decrease to 2.3 percent this year and 1.8 percent in the subsequent year.

However, exports were not expected to provide any impetus for the economy before the middle of the year. The ongoing trend of companies relocating production abroad indicates the onset of deindustrialization in Germany. According to a recent analysis by the German Economic Institute, repeated high net investment outflows also point to such a trend.

German Minister of Economics Robert Habeck stressed the urgency of restoring companies' confidence in investment opportunities. He also pointed to some favorable conditions, such as stable energy prices and inflation, and government initiatives to reduce bureaucracy, enhance skilled labor recruitment and advance the energy transition.