German Economy Probably Stalled At Start Of 2024, Survey Shows

(Bloomberg) -- Germany’s economy probably failed to grow again at the start of the year, according to a Bloomberg poll.

Having already expanded during only one quarter of 2023, analysts surveyed Feb. 2-8 said they now expect gross domestic product to stall in the three months through March. That compares with a prediction of 0.1% growth last month.

That new projection is in line with the Bundesbank, which has said that even if the situation around household income is improving, output may “stagnate at best” in the first quarter. 

A third of respondents in the Bloomberg survey are even more pessimistic, forecasting a contraction, which would in turn mean that Germany is in recession.

“The data still point toward a modest contraction in the first quarter, although it seems like the bottom is near,” said Erik-Jan van Harn, an analyst at Rabobank. “Sentiment improved a little in the manufacturing sector, while activity remains robust in the services sector.”

Germany was the only Group of Seven economy to shrink last year, and a rising number of economists including those at the country’s two largest lenders — Deutsche Bank and Commerzbank — predict another contraction in 2024. The outlook for the coming years isn’t much more promising, with the council of economic advisers seeing potential growth at just 0.4%.

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