Citing sources who have seen the so-called Joint Economic Forecasts, to be presented in Berlin on Wednesday, Reuters reported on Tuesday that the German economy is likely to narrowly skirt recession and post modest growth in the first quarter of the year.

Key takeaways

“Joint Economic Forecasts expect a 0.1% expansion in the gross domestic product in the first quarter. This follows a 0.4% contraction in the fourth quarter of 2022.”

“The five economic institutes which prepare the Joint Economic Forecasts predict GDP growth in Germany of 0.3% in 2023, up from a predicted contraction of 0.4% in the autumn.”

“For 2024, the institutes - four German and one Austrian - forecast GDP growth of 1.5%, down from 1.9% previously.”

“The economic institutes predict inflation of 6.0% in 2023, before slowing to 2.4% in 2024.”

Market reaction

The Euro is catching fresh bids on the above report, as EUR/USD is adding 0.33% on the day to trade at 1.0930.