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"The German economy is only very slowly working its way out of
the recession," Ifo's head of economic forecasts, Timo
Wollmershaeuser, said.
German gross domestic product is expected to fall by 0.4% this
year, more than the 0.1% forecast by the Ifo Institute in March.
"When we compare Germany with our main trading partners, these
countries are at least expected to post growth," Wollmershaeuser
said. Ifo forecasts eurozone GDP will expand by 0.6% this year
and the U.S. by 0.9%.
The economic institute has also cut the forecasts for Germany in
2024 to 1.5% GDP growth, down from the 1.7% it previously
expected.
Inflation is forecast to ease slowly from 6.9% in 2022 to 5.8%
this year, down to 2.1% in 2024. Regarding core inflation, the
Ifo Institute forecasts it will increase to 6% this year from
4.9% in the previous year, before falling to 3% in 2024.
Due to inflation, private consumption will fall by 1.7% this
year, the economic institute forecasts. It will not rise again
until 2024, when it is expected to post a 2.2% increase.
The number of unemployed will rise slightly in 2023, but the
unemployment rate will remain unchanged from the previous year
at 5.3% this year, rising to 5.5% in 2024.
New government borrowing will fall from 106 billion euros ($115
billion) in 2022 to 69 billion this year and 27 billion next
year, according to Ifo's estimates.
($1 = 0.9162 euros)
(Reporting by Maria Martinez; editing by Matthias Williams and
Alex Richardson)
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