The ifo Institute said in a report on Tuesday that it expects the German economic output to shrink in the first quarter of 2024, thus falling into recession.
"According to our current ifoCAST estimate, gross domestic product is likely to contract by a further 0.2 percent," Timo Wollmershaeuser, head of Forecasts at ifo, stated. "Companies in almost all sectors of the economy are complaining about falling demand. In manufacturing and construction, the sizable order backlogs that companies had built up during the coronavirus pandemic have now melted away. Incoming orders have been declining for many months, and a wave of cancellations has swept across the country, particularly in residential construction," he added.
According to Wollmershaeuser, the decline in GDP comes as a result of the restrictive monetary policy in Europe and the US, which is "now taking full effect," as well as due to other factors such as high illness levels, rail strikes and cold weather.
