German GDP set to contract by 0.6% in the current year

Posted on October 3, 2023   |  

Germany's economy is set to contract by 0.6% in 2023 due to higher interest rates and inflation, a change from the earlier 0.3% growth forecast.

Recent data suggests a decline in business confidence, indicating reduced production in the third quarter of 2023.

Encouragingly, higher wages and lower energy costs have improved people's spending power.

The end of the year is expected to bring a modest 0.2% growth recovery.

Economic institutes predict a 1.3% GDP growth for 2024, down from the previous 1.5% forecast, with a 1.5% expansion projected for 2025.

Inflation is projected to be 6.1% in 2023, declining to 2.6% in 2024, with core inflation rates at 6.1% and 3.1%, respectively.