German Economy Expected to Decline for Second Consecutive Year
The prediction is that Germany’s gross domestic product (GDP) will shrink by 0.2 percent this year, a slight improvement from the 0.3 percent contraction experienced in 2023.
The German economy is expected to decline for the second consecutive year as per Berlin’s announcement on Wednesday.
The Ministry for Business and Climate Protection stated on its website that various structural factors such as demographic changes, competitive challenges, and economic fragmentation are impacting the German economy.
Furthermore, persistently weak domestic and foreign demand, along with restrictive monetary policy, are hampering economic growth, resulting in a projected 0.2 percent real-term decrease in German economic output this year.
The German Institute for Economic Research (DIW) highlighted the growing disparity in how much low-income groups spend on rent compared to wealthier households. The report suggests the need for targeted assistance for low-income renters and expansion of social housing to address these challenges.
Berlin’s target of constructing 400,000 apartments annually in 2021 fell short, with only 294,400 units completed last year.
The Associated Press and Reuters contributed to this report.
