German Growth Outlook Slashed for 2024 on Weak Demand and Energy Costs, Muted Recovery Seen in 2025

German economic institutes cut 2024 growth forecast from 1.2% to 0.1% due to weak demand for capital goods and high energy prices affecting exports
Recovery expected in 2nd half of 2024 driven by recovering consumer purchasing power as inflation slows
2025 growth forecast unchanged at 1.4%, but lower 2024 baseline means weaker overall outlook
Interest rates and housing market expected to recover somewhat by 2025
Strikes and supply chain issues also hampering growth, but recent Deutsche Bahn labor deal resolved one major dispute