According to the latest edition of the KPMG Global Economic Outlook, strong global growth is rather unlikely in 2024. There is no short-term end in sight to the geopolitical uncertainties and the restrictive monetary policy of the central banks. This year's report, compiled by KPMG's Chief Economists, looks at the economic prospects of more than 30 countries up to 2025.

Global trade has reached a low point in recent years. This was due to geopolitical tensions, an increasing relocalization of production sites and a decline in consumer spending. Global GDP growth of 2.2% is forecast for 2024 - a decline of 0.4 %-pts. compared to 2023.

For Germany, the Global Economic Outlook predicts economic growth of 0.6% for the coming year. This puts Germany back on a growth path, although it only ranks 28th out of the 35 countries surveyed. The year 2025 looks more promising: we expect Germany's GDP to grow by around 1.6%.

You can find monthly updates on Germany as a business location here.

Germany faces recession

The German economy has slipped into recession in 2023. Our forecast assumes a decline in gross domestic product of 0.2 %. This puts Germany below most other industrialized countries. The subdued growth of the emerging markets is also not providing any impetus for the export nation.

Slight growth expected for 2024

We expect economic growth of 0.6% for the coming year. This means that Germany will return to the growth path, albeit still at a rather low level. Rising wages and falling living costs promise to revive flagging consumption. The business climate is less pessimistic than in the fall.

Inflation remains above pre-crisis level

After 6.1% in the past year, we expect an inflation rate of 2.9% for 2024. Although this is a significant decline, prices will remain at a high level and continue to rise faster than the ECB's 2% target. The savings rate remains high and consumption is restrained.

Key interest rates remain at a high

The ECB appears to be sticking with a key interest rate of 4.5% and waiting to see how inflation develops. No cuts can be expected in the coming months. The high level of interest rates is being reflected in the economy and is slowing down the upturn.

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