Leading research institutes had already lowered their forecast for the German economy this year. In their recently published autumn report for the government, economists assume that GDP will fall by 0.1 percent in 2024, marking the second time in a row that it will shrink. This so-called joint diagnosis serves the federal government as a basis for its new projections in October, which in turn form the basis for the tax estimate. According to the “Süddeutscher Zeitung”, Federal Economics Minister Robert Habeck (Greens) is somewhat more optimistic for the next two years than before. He assumes that the economy will slowly overcome the economic weakness and develop more dynamically again. For 2025 he therefore expects a GDP increase of 1.1 percent, slightly more than the flat one percent previously assumed. In 2026 the increase is expected to be 1.6 percent. The leading research institutes are more pessimistic here. They cut their joint forecast for 2025 from 1.4 to 0.8 percent. Growth of 1.3 percent is expected to follow in 2026.
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