In 2024, Germany’s economy is expected to stagnate and fall behind its European peers, according to the German economic institute IW. Despite a stronger start to the year, investments remain depressed due to geopolitical tensions and high interest rates, creating significant gaps in investment that are hindering any potential upswing in the economy.
Germany’s economy shrank by 0.2% last year, making it the weakest performer among major eurozone economies. IW forecasts 0% growth for Germany this year, trailing behind countries like France, Italy, Britain, and the United States. While the government predicts a 0.3% GDP growth, it is not enough to improve business conditions and unlock the country’s full potential.
Foreign trade is expected to provide little economic stimulus as it remains weak. Additionally, Germany’s unemployment rate is likely to increase to an average of 6% for the year. Despite a record number of employed people, the effects of economic weakness are becoming more visible in the labor market.
In conclusion, Germany’s economy faces challenges in 2024 with stagnant growth, weak investments, and a struggling labor market. Policy changes are necessary to boost business conditions and unleash the country’s potential for growth.
