German Economy to Shrink 0.6% in 2023 Before Wages Drive Rebound
- Purchasing power to fuel 1.3% growth next year, institutes say
- Inflation expected to slow to 2.6% in 2024, 1.9% in 2025
Empty tables at a restaurant in Hackescher Market in Berlin.
Photographer: Krisztian Bocsi/BloombergThis article is for subscribers only.
Germany’s economy is on course for its first full year of contraction since the pandemic, new forecasts showed, though rebounding consumption should spur a recovery in 2024.
Output will drop by 0.6% in 2023, according to projections by five institutes that advise the government. That’s a gloomier outlook than those of both the International Monetary Fund and the European Commission. Next year will bring growth of 1.3%, helped by rising wages, lower energy prices and easing supply bottlenecks.