Germany's BDI industry association said on Tuesday that it expects the German economy to grow 0.3% in 2024 while forecasting that the global economy will expand by 2.9%.

"The economy is at a standstill in Germany. Compared to most other major industrialised countries, our country is falling further behind," said BDI president Siegfried Russwurm. "We don't see any chance of a rapid recovery in 2024."

The German economy contracted by 0.3% in 2023, due to persistent inflation, high energy prices and weak foreign demand, the federal statistics office said on Monday.

Russwurm said the challenges facing the economy last year have not faded but rather continued to grow, making 2024 another difficult year for the economy.

The modest growth expected should come from the recovery in consumption as inflation eases, the BDI said.

The BDI predicts that German industry is unlikely to see a real recovery following the crisis-related setbacks of recent years. Production in energy-intensive sectors in particular remain weak due to high electricity prices.

"So far, production has not even reached the pre-crisis level of the last quarter of 2019. There is likely to be a sideways movement for 2024 for the time being," Siegfried said.

The BDI is the latest institution to present a disappointing growth forecast for the euro zone's largest economy.

Three leading German economic institutes cut their 2024 economic growth forecasts in December.

Ifo now expects Germany to grow by 0.9% next year instead of 1.4%, while RWI cut its forecast to 0.8% from 1.1% and DIW dropped its prediction to 0.6% from 1.2%.

 

(Reporting by Maria Martinez Editing by Miranda Murray and Louise Heavens)