by Maria Martinez
BERLIN (Reuters) – The German economy is not recovering as quickly as expected, according to a report published on Thursday by the DIW Berlin economic institute, which predicts a recession at the start of the year.
Gross domestic product is expected to contract by 0.1% in the first quarter, according to DIW, after a decline of 0.3% in the fourth quarter of 2023. A technical recession is defined by two consecutive quarters of decline in activity.
“As inflation continues to fall, private consumption will once again become the main driver of the recovery from the second quarter,” said DIW’s Timm Boenke.
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Although a return to modest growth is expected for the second quarter, the German economy will stagnate in 2024, DIW said, lowering its previous forecast of 0.6% growth.
On Wednesday, the Ifo and Kiel institutes lowered their own growth forecasts for Germany in 2024, but nevertheless forecast a positive figure this year.
“We are a little more pessimistic than our colleagues,” said DIW President Marcel Fratzscher when presenting the forecasts.
In 2025, economic output is expected to increase by 1.2%, according to the DIW, up slightly from the previous forecast of 1.0%.
(Report by Maria Martinez, French version Corentin Chappron, edited by)
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