After the recession in 2023, the economic researchers at the DIW also see an end to the economic weakness. The driving force for an upturn is likely to be private consumption, the experts predict.
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 that 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, tariff increases will take effect in the long term, strengthening income security and making people more inclined to consume. Low-income households will also have higher incomes at their disposal, the DIW expects. The inflation rate will 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 expects 0.4 percent (2025: 1.5 percent).
DIW forecast
Source: Stern
