Germany: 2024 GDP Could Be Worse than Expected

German GDP estimates continue to be revised downward. Europe’s most important economy, in fact, will not even grow in 2024: gross domestic product should be +0.1% in 2024, and to see a minimal recovery we will have to wait until 2025, when growth is forecast at 1.4%. This is the estimate given by the five major German economic research institutes in a press release from the Kiel Institute for the World Economy (IFW).

“Cyclical and structural factors overlap in slow overall economic development. While the recovery is likely to start in the spring, the overall momentum will not be too strong,” says IFW Head of Economic Research Stefan Kooths, who explains how private consumption will be the main driver of the economy in 2024, followed by stronger exports only next year.

Productivity in Germany has plummeted, and industrial production is barely above pre-pandemic levels. “German exports fell despite a pickup in global economic activity, mainly because demand for capital and intermediate goods important to Germany was weak and the price competitiveness of energy-intensive goods suffered,” the document said.

Inflation is also estimated at 2.3% this year and 1.8% in 2025, with nominal wages expected to rise by 4.6% in 2024 and 3.4% in 2025, offsetting most of the loss of purchasing power accumulated between 2022 and 2023.