The German economy is expected to contract by 0.1 percent in the second quarter of 2024, the Handelsblatt newspaper writes on July 30, based on data from the Federal Statistical Office.
The German economy has been stagnating for a long time and has not shown growth of more than half a percentage point for almost two years. The last time a significant increase of 0.6% was recorded was in the third quarter of 2022.
The second quarter decline follows a minimal 0.2% increase in the first quarter and a 0.4% drop in the fourth quarter of 2023.
The main reasons for the stagnation are both external and internal factors, including the weak state of German industry and a lack of orders.
At the same time, private consumption also fell short of expectations, largely due to the high level of uncertainty in the economy and politics.
According to the latest Ifo business climate index survey, the German economy has seen a third consecutive decline to 87.0 points in July 2023. Clemens Fuest, President of Ifo, believes that the German economy is stagnating.
The German government is implementing a “growth initiative” approved by the federal cabinet, which includes measures aimed at stimulating economic growth.
The measures include an increase in depreciation and support for scientific research. However, experts such as Stefan Couts of the Kiel Institute for World Economics have expressed doubts about whether the target of increasing potential growth by 0.5 percentage points will be achieved.
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Source: Rossa Primavera
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