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By Marc Menendez-Roche • Published: 17 Mar 2025 • 12:36 • 1 minute read
Close up of euro banknotes with a german flag.German economy takes a hit: Growth slashed in half despite massive budget boost.Credit: Shutterstock, RaffMaster
Germany’s economic woes deepened today, March 17, as one of the country’s top think tanks halved its growth forecast for the year – despite a massive spending boost looming on the horizon.
The Munich-based Ifo Institute now expects Germany’s GDP to crawl ahead by just 0.2% in 2024, slashing its January forecast of 0.4% in half. This comes even as political heavyweights push for a €1 trillion spending spree aimed at revitalising infrastructure and defence over the next decade.
“The German economy is treading water,” warned Timo Wollmershäuser, head of forecasts at Ifo. “Despite a recovery in purchasing power, consumer sentiment remains subdued, and companies are also reluctant to invest.”
The warning shot comes as the centre-right Christian Democrats (CDU), led by Friedrich Merz, and the ruling Social Democrats (SPD) push a dramatic shift in Germany’s budget rules, scrapping the country’s long-standing obsession with fiscal discipline.
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Written by
Marc Menendez-Roche
Marc is a writer, teacher, and language enthusiast. With a background in business and legal communication and an interest in educational neuroscience, Marc has spent over a decade teaching and writing. Now, as part of the team at Euro Weekly News, Marc enjoys diving into entertaining topics and stories that matter to the community. When he’s not writing, Marc loves practising martial arts, playing football, cooking up a storm in the kitchen, or spending quality time with friends and family, but above all, Marc enjoys spending time with his son, Macson.
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