News

Germany’s Economy to Contract, Entering Recession

1 Mins read

Germany’s economy is expected to contract again in the current quarter, solidifying a recession in Europe’s largest economy, according to a fresh government forecast published on Wednesday. The German economy already experienced a 0.1% decline in the third quarter, and current indicators suggest another slight decrease in gross domestic product in the final three months, as per the monthly report by the economy ministry.

Challenges and Outlook

The report highlights that fiscal complications arising from Germany’s constitutional court ruling, which reduced public spending by around 60 billion euros ($64.77 billion), have weighed on the economic outlook. Nonetheless, Chancellor Olaf Scholz’s government managed to agree on a 2024 budget, putting an end to weeks of turmoil that threatened to impact the ruling coalition.

While growth is expected to return in 2024, sentiment indicators for both companies and households suggest a slightly more positive outlook. However, risks to any economic recovery persist due to the weak global economy, ongoing geopolitical crises, and associated spikes in commodity prices, according to the ministry.

Impact on Investment and Consumption

The ministry predicts that even positive trends in investment will noticeably weaken, but household consumption should stabilize due to rising real wages and cooling inflation.

Economic Forecasts

The German government previously projected a 0.4% decline in German GDP for 2023 as a whole before rebounding with 1.3% growth next year. Economists polled by FactSet anticipate a 0.2% decline in the German economy in the fourth quarter of this year.

Meanwhile, the European Central Bank will release new economic forecasts for the bloc during its monetary policy meeting on Thursday.

Related posts
News

Solana Price Prediction: SOL Price Could Jump 15% But One Meme Coin Set For Life Changing Gains - Crypto Economy

2 Mins read
While SOL continues its impressive run, another project is quietly building momentum, promising not just gains but genuinely life-changing opportunities for early…
News

The costliest chai in India: How credit cards sell you the lounge dream

6 Mins read
Twitter is full of airport lounge selfies. The chai and coffee is free and the chairs feel premium. But the real cost…
News

Wall Street veteran uses AI to imagine MicroStrategy's Chapter 11 bankruptcy in 2026

1 Mins read
Though the MicroStrategy (Nasdaq: MSTR) stock is more than 2,000% up over the last five years, not everyone is positive about the…

Leave a Reply

Your email address will not be published. Required fields are marked *

− 1 = 8