Germany's economy is reportedly on a modest growth trajectory with the DIW adjusting its GDP forecasts upwards for 2024 and 2025. The improvements to 0.3% growth this year and 1.7% next year are driven by increased private consumption and exports, despite existing structural challenges such as competitiveness and skilled labor shortages. DIW's president highlighted risks associated with US trade policies and stressed the need for the German coalition government to present a coherent budgetary strategy moving forward, particularly as a new infrastructure investment package is anticipated to positively impact the economy in 2025.
Germany's economy is showing signs of modest growth, with forecasted GDP increases driven by rising consumption and exports, though structural weaknesses persist.
DiW's chief economist noted that while the economy has rebounded, challenges like declining competitiveness and labor shortages remain unresolved.
Marcel Fratzscher warned of the risks posed by US trade policy and domestic political issues, calling for greater unity in Germany's governmental budget plans.
The anticipated infrastructure investment package is viewed positively, offering a potential boost to the economy by 2025.
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