IMF cuts development outlook for Germany – DW – 04/16/2024 | EUROtoday

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Germany’s economic system will develop lower than anticipated this 12 months, the International Monetary Fund (IMF) stated on Tuesday.

It stated it anticipated the German economic system to develop by 0.2%, which is 0.3 share factors lower than it estimated in its January outlook.

What did the IMF say about development in Germany and the eurozone?

According to the figures, Germany is predicted to have the weakest development of any state belonging to the G7 group of industrialized international locations.

For 2025, the group expects the German economic system to develop by 1.3%.

The report cited structural issues such because the decline within the working inhabitants and obstacles to funding as main considerations.

The IMF additionally revised its outlook for the second-largest economic system within the eurozone, 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 stated 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 advised the Agence France-Presse information company that Germany was being impacted by growing competitors from China, the transition to a inexperienced economic system and the rise of power prices following Russia’s invasion of Ukraine.

Also on Tuesday, Chancellor Olaf Scholz was in Beijing for talks after he known as for “fair competition” with China.

World will not see recession; Russia doing higher than anticipated

The fund stated the world won’t endure a recession this 12 months.

The IMF expects world inflation to common 5.9% in 2024, 0.1 share factors greater than forecasted in January.

Inflation is predicted to be 4.5% in 2025, with a fee of solely 2% in industrialized states.

The IMF warned that growing geopolitical fragmentation might disrupt provide chains, resulting in decrease development and better inflation.

The fund additionally revised upwards its forecast for Europe’s fifth-largest economic system, that of Russia, despite Western sanctions.

It had predicted 2.6% development for Russia in January and now foresees 3.2%. Its development in 2025 is predicted to be 1.8%.

Experts have pointed to Russian navy spending, which has helped enhance manufacturing since Moscow launched its battle in Ukraine. Social transfers have additionally led to a rise in consumption

sdi/sms (AFP, dpa)

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