Close up of euro banknotes with a german flag.
German economy takes a hit: Growth slashed in half despite massive budget boost.
Credit: Shutterstock, RaffMaster
Germany’s economic woes deepened today, March 17, as one of the country’s top think tanks halved its growth forecast for the year – despite a massive spending boost looming on the horizon.
The Munich-based Ifo Institute now expects Germany’s GDP to crawl ahead by just 0.2% in 2024, slashing its January forecast of 0.4% in half. This comes even as political heavyweights push for a €1 trillion spending spree aimed at revitalising infrastructure and defence over the next decade.
“The German economy is treading water,” warned Timo Wollmershäuser, head of forecasts at Ifo. “Despite a recovery in purchasing power, consumer sentiment remains subdued, and companies are also reluctant to invest.”
The warning shot comes as the centre-right Christian Democrats (CDU), led by Friedrich Merz, and the ruling Social Democrats (SPD) push a dramatic shift in Germany’s budget rules, scrapping the country’s long-standing obsession with fiscal discipline.
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