(Bloomberg) -- Germany’s economy will barely muster any growth this year — meaning it won’t manage to significantly rise above its pre-pandemic size. 

Output will rise just 0.1% in 2024, compared to a previous forecast for 1.3% expansion, according to five institutes that advise the government. Growth is seen picking up to 1.4% in 2025.

“Cyclical and structural factors are overlapping in the sluggish overall economic development,” said Stefan Kooths, Head of Economic Research at the Kiel Institute for the World Economy. “Although a recovery is likely to set in from the spring, the overall momentum will not be too strong.”

Since the previous forecast in September, private consumption picked up later than thought and demand for German goods from abroad remained weak, according to a statement. Uncertainty about economic policy, meanwhile, weighed on corporate investment. 

Such factors probably tipped the German economy into recession at the end of last year, though some indicators have started signaling a turnaround. Business expectations in an Ifo survey rose more than expected this month, with firms hoping to benefit from a global upswing. 

For now, output is “barely higher than before the pandemic,” according to a statement Wednesday from the institutes. “Since then, productivity in Germany has been at a standstill.”

In a separate analysis on Wednesday, International Monetary Fund officials highlighted that the economy’s terms of trade have recovered, its trade surplus is exceeding historical averages and likely to rise further, and that “concerns about widespread de-industrialization are similarly overstated.”

Instead, Germany’s real issues are an aging population, underinvestment and too much red tape, staff at the Washington-based fund observed.

“Germany faces important economic challenges, but it also possesses policy levers to overcome them and secure a brighter economic future,” the officials wrote. “It’s time to use them.”

--With assistance from Catherine Bosley.

(Updates with IMF report in seventh paragraph)

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