BERLIN, May 8 (Reuters) - The German economy is expected
to recover more slowly next year than previously forecast as the
need for spending on greener infrastructure mounts, the
Organisation for Economic Cooperation and Development (OECD)
said on Monday.
Gross domestic product in Europe's largest economy will
increase by 0.3% in 2023 and 1.3% the following year, according
to projections released in the OECD's latest economic survey of
the country.
In March, the OECD had predicted GDP growth in 2024 of 1.7%.
The forecast for this year was unchanged.
The report called on Berlin to speed up its transition
towards a more digital and climate-friendly economy, for example
by showing more flexibility on its debt rules to allow for
necessary investments.
However, it also warned against expansive fiscal policy in
order to shield German competitiveness.
"After 10 years of dynamic export-induced growth, falling
unemployment and budget surpluses, the pandemic and the energy
crisis showed that Germany has structural weaknesses and
urgently needs to accelerate its ecological and digital
transformation," the report said.
In a separate assessment of Germany's progress on climate
goals, the OECD recommended that Berlin work to expand its power
network and renewable energies infrastructure.
It also called on Germany to modernise its transport network
and said speed limits posed an untapped opportunity to bring
down carbon emissions.
(Reporting by Reinhard Becker and Rachel More
Editing by Miranda Murray)
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