Low economic growth expected: OECD expects 2024 in Germany

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In November, the OECD expected economic growth in Germany to reach 0.6 percent this year.

The organization also lowered its growth expectations for the euro area slightly to 0.6 percent for 2024. In the short term, the economy will be held back by tight credit conditions. For 2025, the OECD expects growth of 1.1 percent in Germany and 1.3 percent in the euro zone.

Compared to 2023, the OECD expects global growth to weaken overall. It predicts growth of 2.9 percent for the global economy this year, slightly more than the organization assumed in the fall. In 2023 that was 3.1 percent.

The consequences of tight financial conditions are being reflected in real estate and credit markets, the OECD said. World trade remains subdued. The attacks on ships in the Red Sea caused freight costs to rise sharply and shipping times to become longer. This increases price pressure and disrupts production schedules.

Overall, the organization views strong geopolitical tensions as a key short-term risk to the economy and inflation. This is especially true if the conflict in the Middle East disrupts the energy market.

Given the increasing debts and upcoming expenditure, the OECD sees the financial pressure on governments increasing. Moreover, stronger international cooperation is needed to revive global trade, make faster and better progress on decarbonization, and ease debt burdens in lower-income countries. (SDA)

Source: Blick