MercoPress. South Atlantic News Agency

German and French economies slowing down in 2024, IMF report

The German economy is expected to grow by 0.2%, which is 0.3 percentage points less than it estimated in its January outlook

Europe's strongest economy is expected to grow by 0.2%, 0.3 percentage points less than it estimated in its January outlook, according to the latest report from the International Monetary Fund, IMF, on Germany. This is also the weakest among the G7 group of industrialized nations.

The report said structural problems such as the decline in the working population and obstacles to investment as main concerns

IMF also revised its outlook for the second-largest economy in the euro zone, with its forecast for France dropping from 1% to 0.7%.

“In the euro area, growth will pick up this year, but from very low levels, as the trailing effects of tight monetary policy and past energy costs, as well as planned fiscal consolidation, weigh on activity,” the IMF said in its report.

“Stronger household consumption, as the effects of the shock to energy prices subside and a fall in inflation supports growth in real income, is expected to drive the recovery,” it added.

BNP Paribas economist Stephane Colliac said that Germany was beinbg impacted by increasing competition from China, the transition to a green economy and the rise of energy costs following Russia’s invasion of Ukraine.

IMF underlined taht the world will not undergo a recession this year, and expects global inflation to average 5.9% in 2024, 0.1 percentage points higher than forecasted in January. Inflation in 2025 is expected to reach 4,5%, and only 2% in industrialized countries.