The International Monetary Fund (IMF) expects the German economy to shrink by 0.5 per cent this year, representing a downward revision from its July estimate of 0.3 per cent contraction.
In 2024, Europe’s biggest economy would be on track to make a recovery and grow by 0.9 per cent, the Washington-based lender said on Tuesday.
But that is also a gloomier forecast than had been anticipated three months ago, when it expected gross domestic product to rise by 1.3 per cent in 2024.
The IMF cites the weakness of interest-sensitive sectors, lower demand from Germany’s trading partners, and, consequently, declines in industrial production for the downgraded estimates.
The German government said earlier in the month that it expected the country’s export-driven economy to shrink by 0.4 per cent this year.
It blamed the persistent inflation, high energy prices, and the weakening global economy.
In 2022, Germany’s economy grew by 1.8 per cent.