Current:Home > InvestGerman government forecasts that the country’s economy will shrink by 0.4% this year-VaTradeCoin
German government forecasts that the country’s economy will shrink by 0.4% this year
View Date:2025-01-07 14:08:20
BERLIN (AP) — Germany’s government said Wednesday that it expects the country’s economy to shrink by 0.4% this year, joining a string of other forecasters in revising sharply downward its outlook for Europe’s biggest economy.
The revised forecast contrasted with the 0.4% growth that the government predicted in late April. The Economy Ministry said in a statement that “the effects of the energy price crisis in combination with global economic weakness are weighing down the German economy more persistently than was assumed in the spring.”
On Tuesday, the International Monetary Fund forecast that the German economy will shrink by 0.5%. A group of leading German economic think tanks last month predicted a 0.6% contraction.
The government predicted that gross domestic product will increase by 1.3% next year and 1.5% in 2025, helped by a decline in inflation. That is expected to average 6.1% this year, but drop to 2.6% next year and 2% in 2025.
The Economy Ministry said it expects the economy to pick up around the turn of the year and then accelerate, helped by recovering consumer demand. It acknowledged that the “necessary fighting of inflation” by the European Central Bank, which has resulted in higher borrowing costs, has been a factor in Germany’s difficulties.
Germany has also been grappling with other issues such as an aging population, lagging use of digital technology in business and government, excessive red tape that holds back business launches and public construction projects, and a shortage of skilled labor.
Last month, Chancellor Olaf Scholz, whose government is grappling with poor poll ratings and a reputation for infighting, urged Germany’s opposition and regional governments to help slash a “thicket of bureaucracy.”
veryGood! (565)
Related
- US inflation may have picked up in October after months of easing
- Michigan lawmaker who was arrested in June loses reelection bid in Republican primary
- Drones warned New York City residents about storm flooding. The Spanish translation was no bueno
- Olympic disqualification of gold medal hopeful exposes 'dark side' of women's wrestling
- Democrat Ruben Gallego wins Arizona US Senate race against Republican Kari Lake
- Charges: D'Vontaye Mitchell died after being held down for about 9 minutes
- Harris and Walz are showing their support for organized labor with appearance at Detroit union hall
- 'Her last jump of the day': Skydiving teacher dies after hitting dust devil, student injured
- Mega Millions winning numbers for November 8 drawing: Jackpot rises to $361 million
- Residents in Alaska capital clean up swamped homes after an ice dam burst and unleashed a flood
Ranking
- Cruise ship rescues 4 from disabled catamaran hundreds of miles off Bermuda, officials say
- USA men's volleyball mourns chance at gold after losing 5-set thriller, will go for bronze
- 1 of last GOP congressmen who voted to impeach Trump advances in Washington’s US House race
- Boxer Lin Yu-Ting, targeted in gender eligibility controversy, to fight for gold
- 'America's flagship' SS United States has departure from Philadelphia to Florida delayed
- USA's Quincy Hall wins gold medal in men’s 400 meters with spectacular finish
- The GOP and Kansas’ Democratic governor ousted targeted lawmakers in the state’s primary
- Amid intense debate, NY county passes mask ban to address antisemitic attacks
Recommendation
-
As the transition unfolds, Trump eyes one of his favorite targets: US intelligence
-
Charges: D'Vontaye Mitchell died after being held down for about 9 minutes
-
Connie Chiume, Black Panther Actress, Dead at 72: Lupita Nyong'o and More Pay Tribute
-
Severe flooding from glacier outburst damages over 100 homes in Alaska's capital
-
Jessica Simpson’s Sister Ashlee Simpson Addresses Eric Johnson Breakup Speculation
-
Texas man accused of placing 'pressure-activated' fireworks under toilet seats in bathrooms
-
Charges: D'Vontaye Mitchell died after being held down for about 9 minutes
-
Boxer Lin Yu-Ting, targeted in gender eligibility controversy, to fight for gold