The IFO Institute, citing the sluggish consumer climate and the reluctance of companies to invest in Monday, on Monday.

In particular, the German Institute estimates that Europe’s largest economy will run at a rate of just 0.2% in the current yearagainst December estimates for 0.4%growth if the country fails to overcome the structural challenges it faces.

IFO, however, predicts that in 2026 The German economy will show some improvement, awaiting growth of 0.8%.

As for the current year, the Institute notes that its cutting prediction reflects some risks as a result of forthcoming economic policy decisions in Germany and the United States.

The IFO report on the course of the German economy was completed on Thursday, namely the day before the anticipation of German Chancellor Friedrich Mertz announced that it had secured the critical support of the Socialists and the Greens for the strong increase in government spending, paving the way.

“The German economy has swallowed. Despite the recovery of the purchasing power, the consumer climate remains sluggish and Companies are reluctant to invest“, Said Timo Wollmershaeuser, head of financial studies at IFO.

As the Institute notes, the industry is facing weak demand and growing international competition, and in addition to the significant dangers involved in US policy.

Explains that the German export -based industry could be wounded in loudly from the increases of US duties in European products.

It is noted that Germany is the only country in the group of seven (G7) to record recession in the last two years.