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Recession in Germany: Gross domestic product (GDP) falls by 0.3 percent - experts lower economic forecasts for 2024
According to a report from web.de, the German economy is in a slump. The Federal Statistical Office's preliminary data shows that gross domestic product (GDP) fell by 0.3 percent in 2023, mainly due to high inflation that weighed on private consumption. In comparison, the German economy grew in 2022. Inflation's drag on private consumption could continue to lead to a decline in economic output in 2024, some economists fear. Another negative factor is the debt brake, which makes important investments in climate protection and infrastructure more difficult. Economic forecasts for 2024 have already been lowered, and some economists even conclude...
Recession in Germany: Gross domestic product (GDP) falls by 0.3 percent - experts lower economic forecasts for 2024
According to a report by web.de, the German economy is in a slump. The Federal Statistical Office's preliminary data shows that gross domestic product (GDP) fell by 0.3 percent in 2023, mainly due to high inflation that weighed on private consumption. In comparison, the German economy grew in 2022.
Inflation's drag on private consumption could continue to lead to a decline in economic output in 2024, some economists fear. Another negative factor is the debt brake, which makes important investments in climate protection and infrastructure more difficult. The economic forecasts for 2024 have already been lowered, and some economists do not even rule out a further decline in GDP.
Another problem arises from government spending, which was higher than revenue last year. The federal, state, local and social security deficits amounted to a good 82.7 billion euros. Although Germany has adhered to the European debt rule for the second year in a row, the financial restrictions imposed by the Federal Constitutional Court ruling could affect the economic recovery.
As a financial professional, it is important to analyze the potential impact of these factors on the market and the financial industry. A decline in GDP and a subdued economy could lead to market fluctuations and reduced investment appetite. The possible slowdown in government spending could also lead to a decline in economic activity in key sectors such as infrastructure and construction. Overall, these factors could lead to increased uncertainty in the financial sector.
It is therefore crucial that governments and financial institutions respond to these developments and take appropriate measures to boost confidence in the economy and ensure long-term stability. This could include, for example, promoting investment and targeted fiscal policy to stimulate economic growth and reduce potential risks.
Read the source article at web.de