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Lack of momentum to weigh on German economic growth in 2024 – IMK institute

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– Germany’s economy will grow more slowly than previously expected next year due to a lack of positive momentum towards the end of this year, the IMK institute said in its forecast on Tuesday.

The experts at the trade unions-affiliated institute predicted 0.7% growth for Europe’s largest economy in 2024, significantly more pessimistic than its spring forecast of 1.2% growth and more cautious than other German economic institutes such as Ifo, which is expecting growth of 1.4%.

For 2023, the IMK expects the economy to contract by 0.5%.

“The German economy, weakened by energy price shocks, will not really get going in the coming months, because high interest rates and a subdued global economy are putting the brakes on,” said the IMK.

While private consumption will recover from the end of the third quarter due to declining inflation and stronger wage increases, “this positive development comes so late that it can only somewhat mitigate the recession in 2023 as a whole, not prevent it,” according to the IMK.

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