Germany is witnessing an economic recession this year
The possibility of Germany sliding into an economic recession before the end of next April is increasing, according to a report by economists issued by the Hans Böckler Foundation today.
The increasing probability of a recession is mainly due to the decline in production in the manufacturing sector in Germany, according to the latest data until December, issued by the Institute for Macroeconomic Policy (IMK) of the Hans Böckler Foundation.
The researchers noted additional negative factors represented by the recent decline in retail sales, in addition to an above-average increasing number of bankruptcy filings by German companies compared to what was the case before the pandemic.
On the other hand, the report noted that the rise in industrial demand contributed to improving prospects to some extent, but the report warned against exaggerating the impact of this factor, according to economist Thomas Theobald at the IMK Institute.
Theobald explained that the rise is mainly due to large orders in the aircraft industry, noting that this isn’t considered an indication of economic momentum.
For his part, the director of the institute, Sebastian Dolin, said in a press statement: “With each passing month, the risk of the economic contraction that we have been witnessing for several quarters turning into chronic weak growth increases”.
It’s worth noting that estimates by the German Central Bank indicated a continued state of weakness that the national economy was experiencing at the beginning of this year.
In its monthly report, the German Central Bank expected that the largest economy in Europe would record some contraction in the first quarter of this year, after the contraction that was recorded at the end of 2023, indicating the possibility that various strikes would play a role in that as well.
