Germany's economic growth will be weaker than expected this year, the International Monetary Fund (IMF) said on Tuesday.
The German economy is expected to grow by 0.2%, 0.3% lower than expected in the January forecast.
What does the IMF say about growth in Germany and the euro area?
According to these figures, Germany is expected to experience the slowest economic growth among the G7 countries.
The group expects Germany's economy to grow by 1.3% in 2025.
The report cites structural issues such as a shrinking workforce and barriers to investment as major concerns.
The IMF also revised its outlook for the eurozone's second-largest economy, lowering its outlook for France from 1% to 0.7%.
“Growth in the euro area is expected to pick up this year, but from very low levels as tight monetary policy, historical energy costs and the impact of planned fiscal consolidation weigh on economic activity,” the IMF said in a report. It will grow,” he said. .
“Strong household consumption is expected to drive the economic recovery as the impact of the energy price shock subsides and falling inflation supports real income growth.''
BNP Paribas economist Stéphane Coriac told Agence France-Presse that Germany was affected by increased competition from China, the transition to a green economy and rising energy costs due to Russia's invasion of Ukraine.
Also on Tuesday, Prime Minister Olaf Scholz traveled to Beijing for talks after calling for “fair competition” with China.
The world will not experience a recession.Russia is doing better than expected
The fund said the world will not fall into recession this year.
The IMF expects global inflation to average 5.9% in 2024, 0.1 percentage point higher than expected in January.
Inflation is expected to be 4.5% in 2025, while inflation in developed countries is only 2%.
The IMF warned that increasing geopolitical fragmentation could disrupt supply chains, leading to lower growth and higher inflation.
The fund also upgraded its forecast for Russia, Europe's fifth-largest economy, despite Western sanctions.
In January, it expected Russia's growth rate to be 2.6%, but it now expects it to grow at 3.2%. Growth rate in 2025 is expected to be 1.8%.
Experts point out that Russia's military spending has contributed to the increase in production since Russia started the war in Ukraine.Social transfers also led to increased consumption
SDI/SMS (AFP, DPA)
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