OECD sees slower Germany rebound

The German economy is expected to recover more slowly next year than previously forecast, the Organization for Economic Cooperation and Development said on Monday.

Germany's economy is on course to grow by 0.3 percent this year, and by 1.3 percent next 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 percent, Reuters reported. The forecast for this year was unchanged.

The report called on Berlin to speed up its transition toward a more digital and climate-friendly economy, for example by showing more flexibility on its debt rules to allow for necessary investments.

Inflation, which was 7.4 percent in March, is expected to average 6.6 percent for the year.

The report 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.

An aging population was identified as an additional economic challenge, w