By Rhod Mackenzie
According to an August 4-10 poll of economists by Bloomberg, the German economy has not recovered from the winter recession and will not show growth in the remaining months of this year.
The trampling in the place of the first economy began in the second quarter. Economists at Bloomberg are predicting a flat chart line for it in the third quarter as well. As for the last three months of 2023, they expect a purely symbolic growth of 0.1%. It is noteworthy that just a month ago, the same forecasts for the third and fourth quarters were 0.1% higher. This indicates that the situation in the German economy is not improving.
The forecast for the German economy for the whole year has not changed - economists still predict a fall in GDP for the whole of 2023 by 0.3%. In 2024, the prospects for the first economy in Europe are estimated more optimistically: growth by 0.8%. But still, the current forecast for next year is worse than the forecast a month ago, which was 1.0%.
The reasons for such a deplorable state of the German economy have not changed either, which for the past couple of decades has invariably “exported” the economy of the continent from all kinds of crises, and now it has received the unpleasant nickname of “sick man of Europe”. This includes weak demand for German goods in China, Germany's main trading partner; and an increasingly palpable shortage of manpower, especially skilled ones; and the tight monetary policy of the ECB, which continues to fight inflation without much success by raising the discount rate; and the consequences of last year's energy crisis that have not completely passed yet. With such a heap of serious problems, it is not surprising that Germany has become the only country in the Group of Seven (G7), which the IMF predicts an economic downturn this year.
Tomorrow, by the way, data for August of one of the key European economic institutions, the Center for European Economic Research (ZEW), should be published. Investor confidence in Germany is expected to continue to decline in the last summer month. Economists expect the August ZEW report to further reduce investor expectations under the pressure of high energy prices, the continuing increase in the discount rate in the eurozone and weak demand across the planet. The tightening of lending conditions also means that there is no need to expect a breakthrough from Germany in the coming quarters.
This article originally appeared in Russian at expert.ru