According to the Ifo Institute's projections released on Wednesday, the German economy will fall more than initially anticipated this year as sticky inflation hurts private spending.
"The German economy is only very slowly working its way out of the recession," Ifo's head of economic forecasts, Timo Wollmershaeuser, said.
In contrast to the 0.1% decline predicted by the Ifo Institute in March, the German GDP is predicted to decline by 0.4% this year.
"When we compare Germany with our main trading partners, these countries are at least expected to post growth," Wollmershaeuser said. Ifo forecasts eurozone GDP will expand by 0.6% this year and the U.S. by 0.9%.
Additionally, the economic institute reduced its estimates for Germany's GDP growth in 2024 from 1.7% to 1.5%.
It is anticipated that inflation will gradually decrease from 6.9% in 2022 to 5.8% this year and 2.1% in 2024. The Ifo Institute predicts that core inflation would rise to 6% this year from 4.9% last year before declining to 3% in 2024.
According to the economic institute, private consumption would decline by 1.7% this year as a result of inflation. It won't grow once more until 2024, when a 2.2% increase is predicted.
While the unemployment rate will remain unchanged from the prior year at 5.3% this year and climb to 5.5% in 2024, the number of unemployed people will slightly increase in 2023.
Ifo forecasts a decline in new government borrowing from 106 billion euros ($115 billion) in 2022 to 69 billion this year and 27 billion next year.
(Source:www.businesstimes.com.sg)
"The German economy is only very slowly working its way out of the recession," Ifo's head of economic forecasts, Timo Wollmershaeuser, said.
In contrast to the 0.1% decline predicted by the Ifo Institute in March, the German GDP is predicted to decline by 0.4% this year.
"When we compare Germany with our main trading partners, these countries are at least expected to post growth," Wollmershaeuser said. Ifo forecasts eurozone GDP will expand by 0.6% this year and the U.S. by 0.9%.
Additionally, the economic institute reduced its estimates for Germany's GDP growth in 2024 from 1.7% to 1.5%.
It is anticipated that inflation will gradually decrease from 6.9% in 2022 to 5.8% this year and 2.1% in 2024. The Ifo Institute predicts that core inflation would rise to 6% this year from 4.9% last year before declining to 3% in 2024.
According to the economic institute, private consumption would decline by 1.7% this year as a result of inflation. It won't grow once more until 2024, when a 2.2% increase is predicted.
While the unemployment rate will remain unchanged from the prior year at 5.3% this year and climb to 5.5% in 2024, the number of unemployed people will slightly increase in 2023.
Ifo forecasts a decline in new government borrowing from 106 billion euros ($115 billion) in 2022 to 69 billion this year and 27 billion next year.
(Source:www.businesstimes.com.sg)