BERLIN, Sept 4 (Reuters) – Germany’s economic output is anticipated to rise by just 0.1% in 2024, according to projections released by the Kiel Institute for the World Economy (IfW), marking a modest recovery after two consecutive years of shrinkage. Although business confidence has strengthened, driven by expectations of increased public spending, challenges such as U.S. trade tariffs continue to constrain momentum. n nStarting in 2025, Berlin plans to utilize newly accessible fiscal resources, which could enhance growth by approximately 0.6 percentage points in 2026, with a follow-up impact of about half that size in 2027. The institute forecasts GDP expansion of 1.3% in 2026 and 1.2% the following year. n nAs economic conditions gradually improve, the jobless rate is expected to decline from 6.3% in 2024 to 5.8% by 2027. However, this recovery comes with a widening fiscal shortfall, projected to grow from 2% of GDP in 2024 to 3.5% by 2027. n n— news from Reuters
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German economy seen growing only 0.1% this year, IfW says
BERLIN, Sept 4 (Reuters) – Germany’s economy is set to tread water this year despite firmer sentiment, with gross domestic product expected to edge up by 0.1% after two years of contraction, according to forecasts published by the Kiel Institute for the World Economy (IfW). n nBusiness expectations have improved on prospects of higher government spending, but U.S. tariff policy remains a headwind, the IfW said on Thursday. n nSign up here. n nBerlin is poised to deploy newly available public funds from 2025, which could lift next year’s growth by about 0.6 percentage points and add a roughly half-sized boost in 2027. n nGDP is seen growing by 1.3% in 2026 and 1.2% in 2027, according to the IfW. n nAs activity improves, the unemployment rate is projected to fall to 5.8% by 2027 from 6.3% this year, while the budget deficit widens from 2% of GDP in 2024 to 3.5% in 2027. n nReporting by Maria Martinez, Editing by Rachel More