By Bahattin Gonultas
BERLIN (AA) – The German Chamber of Commerce and Industry (DIHK) lowered its growth forecast for Germany’s economy from 0% to minus 0.2% for 2024 due to a persistent structural crisis.
The DIHK in a statement Tuesday said it also expects the economy to stagnate next year, and 31% of the companies participating in its survey say they expect their business situation to worsen. The previous survey found only 26% expected the same.
While company investments fall short of pre-pandemic levels, DIHK said that one-third of companies want to reduce their investments, which could mean up to 40% less investments in industrial sectors.
The DIHK cited inadequate investment and “too much bureaucracy” as well as high costs for the decline and the eventual stagnation of the German economy as it lags behind European nations and countries worldwide.
According to the statement, some companies expect the situation to get worse than the potentially zero growth next year, which would be the third consecutive year in the Germany economy without real growth to the gross domestic product (GDP).
In 2020, when the coronavirus pandemic hit, Germany experienced a recession for the first time since 2009. Last year, the German economy shrank 0.3% year-on-year and estimates by the ifo Institute’s forecast were pulled back from 0.4% to zero growth.
The International Monetary Fund (IMF) also cut Germany’s growth forecast for 2024 from 0.2% to 0%.
Germany’s economy was the only one among the G7 countries to shrink.
The German government aims to revitalize the economy with a new growth package.
The package includes 49 measures in strengthening competitiveness, reducing bureaucracy, imposing better work incentives, and establishing an efficient financial center and an energy market for the future.
All eyes are on German GDP data for the third quarter, which is set to be released on Wednesday.
*Writing by Emir Yildirim in Istanbul