This is the second time this year that Ifo has moved to cut the German growth forecast for 2024. The first was the revision lower in January to 0.7%, down from 0.9% in December. And then now, they are moving to cut that forecast to just 0.2%. On the change, Ifo says that:
“Consumer restraints, high interest rates and price increases, the government’s austerity measures and the weak global economy are currently dampening the economy in Germany and leading to another winter recession.”
The institute only expects German economic output to accelerate towards the middle of the year, holding a similar view to IfW earlier here. As for 2025, the firm raises its growth estimate to 1.5% from 1.3% previously.
On the inflation front, Ifo sees inflation falling to 2.3% this year and 1.6% in 2025.