(News Bulletin 247) – Reacting to the German GDP figures released last week, which showed that the first economy in the euro zone had entered recession, Deutsche Bank indicated that it now forecasts a contraction in Germany’s annual GDP of 0 .3% in 2023.
As a reminder, Destatis announced on Thursday a 0.3% drop in GDP in the first quarter of 2023 sequentially, i.e. a second negative variation in a row after that of 0.5% in the fourth quarter of 2022, which corresponded to the technical definition of recession.
Also anticipating a recession in the United States which should weigh on the German economic dynamic towards the end of the year, Deutsche Bank has also lowered its annual forecast for GDP growth in 2024 to 0.5%, against 1% previously.
“Meanwhile, the energy transition policy is straining government cohesion, as evidenced by the lack of agreement on climate legislation this week,” added the German bank.
‘Spending pressures and debt brake limits are adding to the strains. However, none of the three ruling parties has any interest in calling early elections,’ continued the financial establishment.
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