The German Economic Institute (Ifo) has revised its forecasts for the current year downwards and predicts a stagnation of the German economy, even though in its previous report it had calculated a growth of 0.4%.
For next year, Ifo also lowered its estimate to 0.9 percent growth, instead of the 1.5 percent expected for 2026.
The institution’s head of economic studies, Timo Wollmershäuser, said that “the German economy is stagnating and not growing in this slowdown, while other countries are experiencing a rebound.”
“We have a structural crisis. There is very little investment, especially in industry, and productivity has been stagnating for years. We also have a cyclical crisis. The order situation is bad and the increase in purchasing power does not translate into greater consumption, but into more savings, because people do not feel safe,” added the expert.
The savings rate is currently 11.3%, significantly higher than the average of 10.1% over the past ten years before the coronavirus pandemic, notes the report produced by Ifo.
