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Alarm mood for Germany: IMF predicts slow growth!
The IMF warns of weak growth in Germany and calls for reforms. Investments in infrastructure are necessary.
Alarm mood for Germany: IMF predicts slow growth!
The current growth forecast from the International Monetary Fund (IMF) for Germany is alarming: Next year, the IMF expects growth of just 0.9 percent for the German economy. These figures make it clear that Germany could bring up the rear among the large industrialized countries Mercury reported.
The chief executive of the DIHK, Helena Melnikov, is particularly concerned, describing the IMF forecast as a “wake-up call”. The weakness of German industry, particularly in the automotive sector, could have a serious impact on employment. Around four million jobs are affected by China's export restrictions on rare earths, which are putting an additional strain on German production.
Risks and challenges
German economic actors are confronted with several challenges. In particular, the erratic economic policy of the USA and the trade conflict with China are identified as risks. Moritz Schularick, President of the Institute for the World Economy, calls for urgent investment in infrastructure and technology to address structural problems.
The President of the DIHK calls for courage to reform. Important “homework” is reducing bureaucracy, reducing energy costs and taxes, and modernizing the welfare state. Economic growth is also severely affected by uncertainties in the trade situation. As an export nation, Germany is particularly affected by US customs policy, which has a negative impact on foreign trade.
Investments and future prospects
To meet these challenges, Germany is planning record investments through a special fund of over 500 billion euros, which will be used for infrastructure and climate neutrality by 2045. Vice Chancellor and Finance Minister Lars Klingbeil is recruiting investors for this special fund in Washington. The DIHK boss has called on the federal government to initiate continued reforms to promote further growth.
In international comparison, economic growth for Germany is expected to remain low in the coming years. While the IMF even expects growth of 1.0 percent for 2024, the forecasts for 2026 are 1.3 percent, with the German federal government planning more optimistically than the IMF, which estimates growth of 0.9 percent ( Time ).
Global growth forecasts
Global trade flows are increasingly changing and show that China is orienting itself more towards Asia and Europe. These changes are particularly important for the European economy, which must remain stable to meet the challenges of a slowing global economy. IMF chief economist Pierre-Olivier Gourinchas nevertheless expressed positive expectations about higher investments that could stimulate growth in Europe.
The developments over the next few months will be decisive in determining whether Germany is able to overcome the forecast difficulties and maintain its place as a leading export nation.