Flailing ‘sick man of Europe’ Germany blamed for dragging down Eurozone

Flailing ‘sick man of Europe’ Germany blamed for dragging down Eurozone The European Commission (EC) has lowered its economic outlook due to expectations figures will be dragged down by the downturn in Germany’s economy. A new report shows the German economy stagnated in the second quarter of 2023, following a decrease in real GDP of 0.1 percent in the first quarter. Annually, the economy is now projected to shrink by 0.4 percent in 2023, marking a downward revision from the 0.2 percent growth first projected in the EC’s Spring Forecast. Comparing it to the five other major economies in the group, which includes Spain, France, Italy, the Netherlands, and Poland, economists are labelling Germany the ‘sick man of Europe’, being the only major European nation to contract this year. READ MORE: Huge boost for UK economy as Rishi Sunak signs deal with Singapore Economic output across the bloc is now only expected to rise by 0.8 percent this year The growth forecast for the six largest economies in 2023 includes: Spain: 2.2 percent increase France: one percent increase Italy: 0.9 percent increase The Netherlands: 0.5 percent increase Poland: 0.5 percent increase Germany: -0.4 percent. Updated projections show output across the bloc will now only rise by 0.8 percent this year, in contrast to the previous forecast of 1.1 percent. Similarly, next year’s growth outlook has been reduced by an equivalent margin, now standing at 1.3 percent. According to the EC’s report, the Summer Economic Forecast 2023, Germany’s economic contraction can be attributed to factors including real wage declines, weakened exports, and reduced public consumption resulting from the impact of Covid-19. In 2024, real GDP is forecast to rebound by 1.1 percent driven by expectations that consumption will recover. However, this is still by a slightly lower margin than what was projected in spring, primarily due to a ‘slowdown’ in the construction sector and less vigorous growth in exports. Headline inflation in 2023 is expected to come down to 6.4 percent, implying a downward revision from the Spring Forecast, and to 2.8 percent in 2024, which is slightly higher than projected in the spring. SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info Trending