German Economy Faces Contraction in 2024, But eCommerce Sector Shows Growth

eCommerce & German Economy: Key Insights

• Economic Forecast Downgrade: Germany's economy ministry has revised its economic forecast for 2024, predicting a 0.2% contraction.

• eCommerce Sector Defies Downturn: Despite the economic slowdown, Germany's eCommerce sector is projected to grow.

• eCommerce Growth: eCommerce's share in Germany’s retail market is expected to increase.

Germany’s economy ministry is preparing to release a downgraded economic growth forecast for 2024, projecting a 0.2% contraction, according to Sueddeutsche Zeitung. The report follows a series of downward revisions by leading economic institutions, indicating a challenging year for Europe’s largest economy. Despite this forecast, the German eCommerce sector is set to grow,

German Government Revises Economic Growth Projections

The German economy ministry, led by Minister Robert Habeck from the Green Party, is expected to officially announce the anticipated contraction on Wednesday. This 0.2% downturn forecast revises the government’s earlier prediction of a 0.3% growth in 2024, a shift from the 0.3% decline experienced in 2023. Recent forecasts from top German economic research institutes align with this outlook, adjusting their 2024 projections to a 0.1% contraction.

eCommerce Emerges as a Bright Spot

Despite the broader economic slowdown, Germany's eCommerce sector is thriving. In 2023, the eCommerce market reached US$108.1 billion, and projections from ECDB indicate that it will grow further to US$110.7 billion in 2024.

This growth trend in eCommerce contrasts sharply with the overall economic picture. eCommerce’s share of Germany’s retail market, which stood at 16% in 2023, is expected to increase to 17.3% by 2024. The sector’s expansion highlights a consumer shift toward online shopping, driven by changing retail preferences and the convenience of digital marketplaces.

Government Measures and eCommerce Growth

The German economy is facing challenges right now, but eCommerce is still growing steadily. Strong demand is keeping this sector alive. For eCommerce to keep growing long-term, support from the government and regional cooperation are important. As eCommerce expands, it could help offset some of the expected economic slowdown.