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What are the biggest challenges facing the German economy in 2024?

As we enter 2024, Europe’s largest economy is expected to continue to deal with the fallout of its recent economic crisis. Euronews Business highlights five key challenges for the German economy in 2024.

Germany is facing an uphill economic battle in 2024.

Its GDP growth is expected to decline by 0.6% this year, with stagflationary pressures weighing heavy and the threat of a “slowcession” looming large, as indicated by falling manufacturing activity.

The automobile industry, one of the jewels in the German industrial crown, is also poised to struggle, while budgetary constraints are expected to create further problems for households and consumers.

Bad news for German GDP
Some of the world’s major economic organisations have already made gloomy forecasts for Germany’s GDP in 2024.

It’s set to be the only major world economy to shrink this year, according to the International Monetary Fund’s (IMF) latest report, reinforcing its status as the most prominent example of weak growth among major European countries.

Added to this, the OECD predicts that Germany could suffer a huge blow from a ‘slowdown in the world economy’, due to weakening trade and higher interest rates worldwide that spilled over into the new year.

Owing to economic stagflation – persistent high inflation combined with high unemployment and stagnant demand – Germany went through a similar downturn at the end of 2022 and the beginning of 2023, and as such, most economic outlooks are forecasting that its economy will decline by 0.6% this year.

‘Sinking into slowcession’
The year 2023 was deemed a year of stagnation for Germany, with news outlet The Guardian going as far as to question whether it had sunk into a ‘slowcession’, owing to the detrimental mix of persistent inflation and stalling growth.

https://www.euronews.com/business/2024/01/12/what-are-the-biggest-challenges-facing-the-german-economy-in-2024

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