German government will downgrade its GDP growth forecast for 2024 to 0.2% y/y

The German economy is performing extremely poorly, the government will revise its forecast for GDP growth in 2024 to 0.2% y/y from 1.3% previously expected. This was stated by the Minister of Economy and Climate Protection Robert Habeck, Euractiv reports.

In 2023, Germany’s GDP declined by 0.3% compared to 2022, which increased concerns about the deterioration of Europe’s largest economy.

Politicians and business leaders had hoped that the current year would be marked by more positive prospects, but Habeck’s remarks point to a gloomier scenario.

Recently, the publication notes, the economic downturn in the country has been interpreted by some experts as structural rather than temporary. Germany is struggling with higher energy prices and higher corporate taxes than its global competitors. At the same time, companies complain about the growing regulatory and bureaucratic burden.

Although the country has a much lower public debt than other G7 countries, the government is divided over whether it should increase it to get out of the current recession.

Recently, Habeck put forward the idea of creating a new €30 billion annual fund, financed by public debt, for industrial subsidies in the form of tax breaks similar to the US Inflation Reduction Act (IRA). However, Finance Minister Christian Lindner has called for a broader cut in corporate taxes to be financed by spending cuts.

According to Bloomberg, Habeck cited the November 2023 decision of the Constitutional Court as one of the reasons for the fall in GDP. The court ruled that the redistribution of €60 billion from unused coronavirus funds to the Climate and Transformation Fund (KTF) was unconstitutional. This decision forced the government to reduce the amount of planned assistance to companies and consumers due to high energy prices.

As GMK Center reported earlier, inflation in Germany slowed to 2.9% in January 2024 compared to January 2023. In December, the figure increased by 3.7% y/y. Thus, inflation in the country reached its lowest level since June 2021 (+2.4%).

  • State

Ukrcement urges authorities to appeal to the EU to postpone CBAM

Ukrcement, the Association of Cement Producers of Ukraine, is calling on the Cabinet of Ministers…

Friday May 9, 2025
  • Global Market

European Commission starts consultations on possible response to US tariffs

The European Commission has launched a public consultation on a list of imports from the…

Friday May 9, 2025
  • Industry

Ukraine increased rolled steel production by 14.2% m/m in April

In April 2025, Ukrainian metallurgical enterprises increased production of commercial rolled metal products by 14.2%…

Friday May 9, 2025
  • Global Market

Latin American steelmakers call for coordinated trade defense

The Latin American steel industry is calling for coordinated action on trade defenses against steel…

Friday May 9, 2025
  • Companies

Tosyalı abandons the acquisition of Liberty Steel in Luxembourg

Employees of the Liberty Steel plant in Dudelange, Luxembourg, are once again in limbo as…

Friday May 9, 2025
  • Society

Metinvest supports creation of a veterans’ hub in Zaporizhzhia

A multifunctional space Missile Veteran PRO. Zaporizhzhia, a hub that will provide comprehensive support to…

Friday May 9, 2025