After the recession, economic researchers see an end to the economic weakness. Private consumption is likely to be the driving force for an upturn.
According to the DIW research institute, the German economy is slowly getting going. The DIW economic experts increased their forecast for economic growth this year to 0.3 percent. At the end of March, they had expected 0.1 percent.
The German Institute for Economic Research in Berlin has announced that growth of 1.3 percent is now expected for the coming year. The DIW expects economic development to gain momentum steadily this year. Private consumption will become the driving force behind the upturn.
In the spring, people were still scrimping and putting money aside due to ongoing uncertainty about their own economic situation. However, private households are now likely to feel more income security. “All signs are green for private consumption, so it is likely to become the most important driver of growth,” said DIW economics chief Geraldine Dany-Knedlik.
After one-off payments in many sectors, wage increases would take effect in the long term, strengthening income security and increasing the desire to consume. Low-income households would also have higher incomes available, the DIW expects. The inflation rate would also fall.
The DIW's assessments are in line with other research institutes that had already published their current forecasts on Thursday. For example, the IfW Kiel expects growth of 0.2 percent this year (2025: 1.1 percent), the RWI 0.4 percent (2025: 1.5 percent).
