German government to downgrade economic growth forecast

The German government is preparing to revise its economic outlook for 2024, with expectations of no growth this year, according to a Bloomberg report citing sources familiar with the matter. Germany, the largest economy in Europe, experienced a decline in gross domestic product (GDP) last year, and the revised forecast is set to reflect further economic stagnation.

The updated outlook is scheduled for release next Wednesday. In its previous forecast, issued in April, the government had predicted a modest 0.3 percent GDP growth for 2024. However, sources indicate that the new assessment will likely reflect stagnation at best, and Germany’s leading economic institutes recently predicted a contraction of 0.1 percent in GDP for the year.

As Germany is the Czech Republic’s largest trading partner, the economic slowdown poses a significant concern for Czech companies that rely heavily on the German market.

This downgrading of economic expectations comes as a blow to Chancellor Olaf Scholz and his coalition government, particularly with general elections looming in 2025. Voters have already shown discontent with the current administration, as reflected in the June European Parliament elections and the September regional elections in the eastern German states of Saxony and Thuringia.

Source: CTK