The federal government today revised its forecast for the economy this year in hand and is now talking about recession of 0.2%. Recovery is expected again in 2025.

According to the Minister of Economy Robert HambeckGermany will be in recession for the second consecutive year, with GDP falling by 0.2%. In the spring, the government’s forecast was for growth of 0.3%, followed by a 0.3% recession in 2023.

However, Mr. Hambek appeared more optimistic for 2025 and 2026, speaking of growth of 1.1% and 1.6% respectively, as an increase in private consumption is expected due to the reduction of interest rates and the strengthening of exports and, according consequence, of private investment. At the same time, the government estimates that the package of tax reliefs, job incentives and reductions in electricity prices will pay off.

Germany is a country full of strength”, said the minister, convinced that “despite the far from satisfactory conditions, we will escape the recession». On the positive side of the economy, he cited the government’s estimate of a reduction in inflation to 2.2%, while admitting Germany’s innovation weaknesses, which have not been addressed, but also the fact that international competition has intensified, partly due to protective US measures.