The German Institute for Economic Research (DIW Berlin) said that the German economy (the largest in the eurozone) is likely to face recession in the first quarter of 2024. According to DIW forecasts, GDP will decline by 0.1% after falling by 0.3% in the fourth quarter of 2023.
"As inflation slows, private consumption will again be the main driver of economic recovery starting in the second quarter," the DIW said, adding that German GDP is likely to remain unchanged this year. Earlier, the DIW expected economic growth of 0.6%. As for 2025, the forecast for economic growth was improved by 0.2% to 1.2%.
Yesterday, two German institutes also lowered their GDP growth forecasts for 2024. Ifo Institute lowered forecast by 0.5%, to 0.2%. However, the forecast for 2025 has been improved to 1.5% from 1.3%. Meanwhile, Germany's IfW Kiel economic institute now expects the economy to expand by just 0.1% in 2024 (previous forecast: +0.9%), but GDP growth is likely to accelerate to 1.2% in 2025. The institute adds that economic output is expected to stagnate in the first half of this year.