The German chambers of commerce and industry (DIHK) said it had revised its forecast for the German economy for the current year, and now expects the eurozone's largest economy to only stagnate. At the beginning of the year, DIHK expected GDP to shrink by 0.5% in 2024.
Commenting on the revision of the forecast, DIHK reported that this year the economy will be supported by an increase in private consumption (+1%) and a decrease in inflation (to 2.3% from 5.9% last year).
Overall, the DIHK survey conducted among 24,000 companies from all sectors and regions shows that hopes that a confident foreign business or a recovery in domestic demand could become a driving force for domestic companies have not been fulfilled. Of the companies surveyed, 28% reported a good current situation in the spring, while 23% reported a bad one. However, business expectations are improving. Only 26% of companies now have negative expectations, compared with 35% in the previous survey. The DIHK sentiment index currently shows a below-average value of 97.2.
Last month, the German government revised its economic growth forecast for 2024 marginally from 0.2% to 0.3%, citing "signs of slight cyclical improvement". Meanwhile, the government is expecting an inflation rate of 2.4% across 2024, falling to 1.8% in 2025.