Media: German economy could shrink by 0.6% this year
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The German economy will contract by 0.6% this year. reported Reuters citing five economic institutions.
Such estimates were given because rising interest rates have a negative impact on investment, and high inflation reduces consumption, the agency clarifies. At the same time, in the spring, institutes predicted a decline in GDP by 0.3%.
“The most important reason for this revision is that industry and private consumption are recovering more slowly than we expected in the spring,” Oliver Holtemoeller, head of macroeconomics at the Halle Institute for Economic Research (IWH), said in an interview with the agency.
According to research, GDP growth is expected to be 1.3% in 2024, and 1.5% in 2025. Inflation will reach 6.1% this year and fall to 2.6% next year. In 2025, German inflation could reach 1.9%.
The Ministry of Economic Development of Russia previously released review “On the current situation in the economy”, according to which Russia’s GDP growth in August amounted to 5.2% in annual terms. In the eight months of 2023, GDP increased by 2.5% compared to the same period last year.
In August, World Economics wrote that the Russian economy in terms of purchasing power parity (PPP) became the fifth largest in the world in 2022, overtaking Germany, France and the UK. At the same time, Russia was assigned a C rating, indicating the authors’ doubts about the available statistical information. The remaining economies in the top 10 are assigned higher A and B.
Russia Economist at Bloomberg Economics Alexander Isakov told Vedomosti reports that Russia’s consolidation in fifth place may be due to record revenues from oil and natural gas exports and the strengthening of the ruble. According to expert estimates, Germany’s growth rate in 2023 will be negative or zero in the range of minus 0.5-0.2%, while the Russian economy will grow by 1.5-2%.
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