Germany’s economy is likely to fail to grow again at the start of the year, according to a Bloomberg poll.
In the survey, conducted 2-8 February, those polled said they now expect gross domestic product to stall in the three months to March, after it had already grown in only one quarter of 2023. That compares with a forecast of 0.1 per cent growth last month.
This new forecast is in line with the Bundesbank, which said that even if the income situation improves, output could “stagnate at best” in the first quarter.
A third of respondents in the Bloomberg survey show a more pessimistic sentiment, predicting contraction, which in turn means Germany is in recession. Erik-Jan van Harn, an analyst at Rabobank, said:
The data still point toward a modest contraction in the first quarter, although it seems like the bottom is near. Sentiment improved a little in the manufacturing sector, while activity remains robust in the services sector.
Germany was the only G7 country to shrink last year, and a growing number of economists, including representatives from the country’s two largest credit organisations, Deutsche Bank and Commerzbank, are predicting another contraction in 2024. Forecasts for the coming years are no more encouraging: The Council of Economic Advisers sees potential growth of just 0.4 per cent.
