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16.01.2024

Plastics News by Plasteurope.com

GLOBAL ECONOMY: German GDP contracts in 2023 / World Economic Forum survey forecasts weakness in Europe

Growth in Europes largest economy declined in 2023, and prospects for the region this year have worsened drastically, according to a survey of economists conducted by the World Economic Forum (Davos, Switzerland; www.weforum.org)

Dark days ahead for Europe's economy? (Photo: Pexels/Kat Smith)


Germanys national statistics office Destatis announced that the country experienced a fall in GDP of 0.3% in 2023 versus 2022, and it said the economic activity suffered the same rate of decline in the fourth quarter compared with the previous three months.

The country apparently skirted a recession, with the office reporting that the economy stagnated in Q3, an upward revision from a previous report of a 0.1% quarterly decrease, but few analysts are ready to predict a swift German recovery in 2024.
Further gloom for Europe
Even more concerning is that the entire region looks poised for a tough year: the forum said its survey released at the beginning of its annual meetings between global political and economic leaders shows economists voicing the most concerns about Europe. The group noted that nearly four out of five of those polled predicted flagging business activity in Europe this year.

The change in the outlook for Europe is particularly stark, with the share of respondents expecting weak or very weak growth almost doubling to 77% since September.

That outlook was much worse than views on the global economy, with only 56% of respondents awaiting weak growth.

And the environment has also worsened, according to the forum: Growth forecasts remain vulnerable to an increased risk of shocks. The geopolitical rifts highlighted as a source of global economic volatility in the last survey have since increased with new conflicts erupting or worsening in Africa, the Middle East, and Latin America.

Almost seven of 10 economists surveyed warned of an increased pace of geoeconomic fragmentation, a position underlined by the survey results: 93% of respondents predicted moderate or strong growth in South Asia, and 88% anticipated the same in countries in the East Asia and Pacific region. In fact, Europe was the only area where a majority projected anything below moderate growth.

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