The OECD warned that political crises and weakening global demand have adversely affected the growth forecasts of Germany and France, with Germany expected to grow by just 0.7% in 2024.
Political infighting and a collapsed coalition government in Germany are causing market concern. The OECD's report highlights how these challenges significantly impact economic growth expectations.
In France, Prime Minister Michel Barnier faces a looming no-confidence vote as his minority government struggles to implement a controversial budget aimed at reducing a substantial deficit.
Despite the bleak forecasts, the OECD noted that low inflation coupled with rising wages could support real incomes and encourage private consumption in the coming year.
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