The German government's economic advisory body on Wednesday lowered its gross domestic product (GDP) growth forecast for this year to 0.2%, down from 0.7% last autumn.
The current development of the German economy is characterized by weak overall economic demand, the German Council of Economic Experts said.
"Private households are currently still reluctant to consume, while industry and the construction sector are only recording a small number of new orders," said council member Martin Werding.
However, the German economy is expected to gain some momentum over the course of 2024. Private consumption will probably begin to support the economy over the course of the year, as real incomes are likely to rise significantly, according to the experts.
The German government is also only expecting a mini growth rate of 0.3%, pointing to the sluggish global economy.
According to a forecast by the European Commission, the German economy will also grow more slowly this year than recently expected.
In an estimate presented by the Brussels-based authority on Wednesday, it predicts minimal growth of just 0.1% for the EU's largest economy in 2024.
The reasons cited include weak foreign demand, sluggish private consumption and insufficient investment. Most recently, the Commission had predicted growth of 0.3% for Germany in 2024.
According to the forecast by the German Council of Economic Experts, inflation in Germany will continue to slow down. The "wise men" expect an inflation rate of 2.4% this year and 2.1% in 2025.
According to the forecast, the German economy is likely to grow by 0.9% next year.
According to the economic experts' forecast, world trade and global industrial production are likely to increase over the course of the current year, which will benefit German exports. However, export-oriented companies are facing fierce competition, rising labour costs and continued increases in energy prices.
