STORY CONTINUES BELOW THESE SALTWIRE VIDEOSBERLIN - The German economy is expected to contract in 2023, the European Commision said on Monday, cutting its forecasts for the euro zone's biggest economy.
Weak consumption and a decline in construction investment are forecast to negatively impact growth, despite an uptick in equipment investment, the European Commission said. In 2024, GDP is forecast to rebound by 1.1% driven by a recovery in consumption. This is less than the 1.4% projected in the spring, due to a slowdown in the construction sector and less dynamic growth in exports.
In the first half of 2023, energy and service price inflation fell more than expected, the commission said. Nonetheless, service inflation is set to remain elevated as wages rise.