BERLIN (Reuters) – The Ifo institute on Wednesday again lowered its economic growth forecast for Germany in 2024, citing uncertainty caused by the budget crisis triggered by a court ruling that forced the government to freeze its spending commitments last November.
The Ifo institute now expects Europe’s largest economy to record growth of 0.7% in 2024, instead of 0.9% previously forecast in mid-December. It forecast growth of 1.4% last September.
The German economy contracted by 0.3% in 2023.
“Now that the budget committee of the German parliament has agreed on the federal budget, we estimate that it has produced additional savings of just under 19 billion euros,” said Timo Wollmershaeuser , responsible for forecasts at Ifo.
“The overall scope is roughly what we estimated in our 2024 risk scenario in December,” he added.
Some economists are even more pessimistic with Ifo, the IMK institute, close to the unions, forecasting a further contraction of the economy by 0.3% this year.
(Reporting Miranda Murray, Rene Wagner and Christian Kraemer, Diana Mandiá, edited by Blandine Hénault)
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