As of: January 31, 2024, 3:21 p.m
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A bleak picture for the German economy: The well-known Berlin institute DIW is not expecting any strong growth for the time being.
© Marcus Brandt/dpa
According to the Berlin DIW Institute, the German economy can hardly expect strong growth impulses for the time being.
The experts said it was fundamentally lacking in dynamism at the start of the year.
Berlin - According to the DIW Institute, an upswing for the German economy, which is at risk of recession, is not yet in sight.
Its economic barometer rose by 3.6 points to 91.2 points in January, as the German Institute for Economic Research (DIW) announced on Wednesday.
However, despite the second increase in a row, it remained well below the 100 mark, which signals average growth in Europe's largest economy.
“New year, new luck – at least for the German economy this does not apply so far,” said the co-head of the forecasting and economic policy department at DIW Berlin, Timm Bönke.
“But it was not to be expected that the mood would be completely different; the obstacles from the past few years are too big for that.” A noticeable upswing is not yet in sight.
Expert does not expect any “significant growth impulses”
The outlook remains cloudy for the time being.
The losses in purchasing power suffered by high inflation in 2022 and 2023 continued to put a strain on private households - and thus also on important consumer spending.
The export-oriented part of the German economy, in turn, suffers from the fact that the global economy is also not dynamic.
“The overall weak order situation, the continued high interest rates and the threat of renewed delivery bottlenecks due to disruptions to the trade route through the Red Sea and export restrictions on strategic raw materials mean that no significant growth impulses can be expected in the near future,” said DIW economic expert Laura Pagenhardt.
The German economy is currently on the verge of recession.
The gross domestic product shrank by 0.3 percent in the fourth quarter of 2023 - mainly because less was invested in buildings and equipment such as machines.
If the second minus in a row follows in the current first quarter, it is referred to as a technical recession.
(Reuters, lf)