Ifo Institute revised its German economic growth forecast

The Ifo Institute has raised its economic growth forecast for Germany in 2024.

According to the statement made by Ifo, the growth expectation for this year was increased from 0.2% to 0.4%. Growth is expected to rise to 1.5% next year.

“A new hope is emerging now,” said Timo Wollmershäuser, Head of Forecasts at ifo. The German economy is slowly trying to get out of the crisis. “The second half of 2024 is expected to be significantly better than the first half.” said.

Ifo predicted that inflation would also slow down, from 5.9% last year to 2.2% this year and 1.7% next year.

“Over the rest of the year, the purchasing power of private households will likely strengthen further and the macroeconomic recovery will accelerate as consumer spending normalizes,” Wollmershäuser said. He expressed his opinion as follows:

Global goods trade and global industrial production are expected to continue to recover, especially from the second half of the year. Wollmershäuser said this was also due to the gradual rise in investments supported by the loosening of monetary policy in industrialized countries.

Ifo Institute expects the European Central Bank (ECB) to make two more interest rate cuts this year.

The number of people employed in Germany is expected to increase from 45.9 million to 46.1 million this year and to 46.2 million next year. According to Ifo, the number of unemployed people will increase from 2.6 to 2.7 million and then decrease to 2.6 million. This shows that the unemployment rate will be 5.7% this year, 5.9% next year and 5.6% in 2026.

Ifo predicts that the public deficit will decrease from 99 billion euros to 73 billion euros and then to 54 billion euros.

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