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IMF lowers growth forecast for Germany again

4 weeks ago
thedialog
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Picture Source: internationalfinance.com

Introduction: The International Monetary Fund largely gives the all-clear for the world economy – it is to grow significantly. But for Germany, expectations decreased again.

Article: The International Monetary Fund (IMF) has revised its economic forecast for Germany downwards again. The German economy will therefore only grow by 0.2 percent in the current year – that is 0.3 percentage points less than the IMF predicted in January. By 2025 the IMF Trusts Germany then an increase of 1.3 percent.

Nevertheless, Germany is likely to do the worst out of the circle of the most important economies. The IMF referred, among other things, to continued weak consumption. 

For global growth, the IMF forecast growth of 3.2 for this year and next Percent – the same rate as already in 2023. Although the values are in long-term comparison – the average is at 3.8 percent – weak. However, after the inflation rose by the Ukraine war, the forecast represents a stabilization.

Normalisation, especially in rich countries

The improved prospects are mainly due to a strong correction in growth expectations for the US back: The US economy is likely to be Accordingly, this would increase by 2.7 percent percent in the current year – that would be 0.6 percentage points more than in the forecast three months ago.

In general, the global economy is surprisingly resilient, said IMF chief economist Pierre-Olivier Gourinchas. “Despite many things, the world has avoided a recession,” he said. It has not given uncontrolled wage-price spirals. Instead, inflation is currently falling almost as fast as it has risen.

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