The German government’s reduction in its forecast for GDP growth from 1.3% to 0.2% brings it closer to our long-held view that the economy will not grow at all this year. But there are growing risks that a recovery will start later and be weaker than we are forecasting. Next week, we expect business surveys to show no significant improvement in February and we think the ECB's measure of negotiated wage inflation will have edged down in Q4 2023.
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