German GDP expected to contract in 2024 and stagnate in 2025, DIHK says

By Maria Martinez

BERLIN, Oct 29 (Reuters) - The German economy will contract by 0.2% this year, the German Chamber of Commerce and Industry (DIHK) said on Tuesday, cutting its previous forecast for a stagnation published in May.

The figures are not optimistic for 2025 either, when DIHK expects zero growth. That would be the third year in a row without real growth in GDP, according to the forecasts.

"We are not just dealing with a cyclical, but a stubborn structural crisis in Germany," said DIHK managing director Martin Wansleben during the presentation of its economic survey for the autumn of 2024.

Business expectations for the coming months in the overall economy do not give reason for optimism either, according to the DIHK.

The survey, conducted among 25,000 companies from all sectors and regions, shows that 31% expect the business situation to worse, up from 26% in the last survey. Only 13% of the companies expect an improvement.

"We are greatly concerned about how much Germany is becoming an economic burden for Europe and can no longer fulfil its role as an economic workhorse," Wansleben said.

Of the companies surveyed, 26% reported a good current situation, down from 28% in summer, while 25% reported a bad one, up from 23%.

The situation is worst in industry, with 35% of the companies rating their situation as bad.

"We last had such a situation 20 years ago during the severe crisis in 2002 and 2003. This is a clear alarm signal," Wansleben said, calling for "profound reforms".

(Reporting by Maria Martinez; Editing by Alison Williams)