By Andrea Thomas and Ed Frankl
Germany's government ticked up its expectations for the country's economic growth in 2024, a further signal that the recent economic weakness in Europe's largest economy may be subsiding.
The German economy is expected to grow 0.3% this year, a little higher than the 0.2% the government forecast in February, the government said in Spring forecasts released Wednesday. This would serve as a modest rebound from the 0.3% decline in gross domestic product in 2023.
Private consumption will drive the economy over the remainder of the year, as falling inflation and the likely dialing back of interest rates gives a boost to spending, the government said. A strong labor market and increased foreign trade will also help, it said.
"The overall environment remains challenging. Nevertheless, the German economy, consumers and production are slowly adapting. The data is now pointing upwards again," said Economics Minister Robert Habeck at a press conference.
However, the country's budget remains tight, and there will be no opportunity for broad tax cuts, he said.
The latest estimate of economic growth comes after Germany's main business gauge, the Ifo index, and purchasing managers' survey data both improved on month in April, reflecting hopes of a rebound from the country's recent stagnation.
Write to Andrea Thomas at andrea.thomas@wsj.com and Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
04-24-24 1138ET
