The leading research institutes have significantly lowered their economic forecast for the German economy. The gross domestic product is expected to grow by 0.1 percent this year and thus virtually stagnate, the institutes announced this morning. Last year the German economy even shrank slightly: by 0.3 percent. Experts expect a recovery again in 2025: then the gross domestic product is expected to grow by 1.4 percent.
When they made their forecast in the fall, the institutes spoke of an increase of 1.3 percent in 2024. However, the fact that they are now reducing this expectation so significantly does not come as a surprise. The federal government wrote in its annual economic report in February that it only expected minimal growth of 0.2 percent this year. “This is really dramatically bad,” said Federal Economics Minister Robert Habeck at the time. The EU Commission predicts an increase of 0.3 percent for Germany.
Twice a year – in autumn and spring – five important research institutes create their so-called Community diagnosis. It is also politically relevant: the federal government uses it as a basis for its own planning and, not least, for tax estimates, which in turn is crucial for negotiations on federal and state budgets. These five institutes are the German Institute for Economic Research (DIW) in Berlin, the Munich ifo Institute, the Kiel Institute for the World Economy (IfW Kiel), the Leibniz Institute for Economic Research in Halle and the RWI – Leibniz Institute for Economic Research in Essen.