Germany raises 2024 GDP growth forecast to 0.3%

The German government  revised its economic growth forecast for 2024 marginally from 0.2% to 0.3%, Economy Minister Robert Habeck confirmed on Wednesday afternoon.

"We are adjusting our expectations marginally upwards," explained the Green Party politician, citing "signs of slight cyclical improvement."

In February, the government sharply lowered its forecast from 1.3% to just 0.2%, so the 0.1% change represents a small glimmer of relief after months of economic stagnation. Habeck said at the time that the economy was in "rough waters" and that the country was "emerging from crisis more slowly than we had hoped."

More 'structural changes' required 

The economy minister said production was "on the up" due to sinking energy prices, which are also starting to drive inflation back down.

This, according to Habeck, is slowly restoring people's purchasing power and boosting privat consumption.

"The fall in inflation will lead to consumer demand, people have more money in their wallets again, and will spend this money," Habeck told a press conference. 

"Signs of an economic upturn have increased significantly, especially in recent weeks," Habeck added. 

However, he noted that "structural changes" would be required for higher growth rates going forward.

This includes the strengthening of innovation and the reduction of unnecessary bureaucracy as well as greater incentives to work "so that more people are willing to work harder and longer."

Habeck said he the government is expecting an inflation rate of 2.4% across 2024, falling to 1.8% in 2025.

mf/wmr (AFP, dpa)

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