Experts are confident that, despite some challenges, both regions will maintain their long-term growth pace, leading to overall economic stability.
Experts expect short-term GDP growth in Germany and the euro area to be weak, but the outlook for 2025 is more optimistic, according to a study by a Mannheim-based institute and a German daily newspaper. It turns out that there is something. Despite challenges, both regions will maintain their long-term growth pace. The expected inflation rate for 2025 remains at 2.2% in both cases.
Germany's quarterly real GDP growth rate shows a decline of 0.1% in Q3 2023 and 0.3% in Q4 2023.
Experts predict that Germany's GDP will increase by 0.3% this year. His 2025 growth forecast remains unchanged at 1.2%, significantly higher than his 2024 forecast.
The outlook for German business investment is even more pessimistic, with growth now at 1.1%, down from 1.7% expected last month. In contrast, the import forecast for 2025 has increased slightly, rising by 0.2 percentage points to 2.9 percent.
Quarterly growth in the euro area decreased by a modest 0.1% in the third quarter and increased by a modest 0.1% in the fourth quarter.
As already seen in February, expectations for the euro area in 2024 fell slightly again, with expectations dropping by 0.1 percentage point to 0.6 percent.
However, economic growth expectations for the region in 2025 remain stable at 1.5%. Comparing Germany and the euro area reveals that Germany's performance lags behind the rest of the euro area, both in terms of current and future prospects.
Inflation rates in Germany and the euro area continue to fall, moving closer to the European Central Bank's (ECB) inflation target of 2%.
The inflation rate in February was 2.5% in Germany (down 0.6 percentage points from January) and 2.6% in the euro area (down 0.2 percentage points from January).
Looking at the whole of 2024, ZEW Mannheim said in a release that it expects average inflation to be 2.6% in Germany and 2.4% in the euro area.
In both cases, the forecast is 0.1 percentage point lower than February's figure.
Expected inflation in 2025 remained at 2.2% in both Germany and the euro area, consistent with last month's figures.
Fibre2Fashion News Desk (DS)
