The Conference Board expects German real gross domestic product (GDP) to grow by a modest 0.3 per cent in 2024 as its leading economic index (LEI) for the country declined slightly by 0.2 per cent in May this year to 87.8, after improving by 0.3 per cent in April—an upward revision based on latest available data.

The LEI contracted by 1.2 per cent between November 2023 and May 2024, a slower rate of decline than the 3.9-per cent contraction over the previous six-month period.

The US think tank’s coincident economic index (CEI) for the country decreased by 0.3 per cent in May to 103.9, reversing a 0.3-per cent gain in April.

Over the six-month period between November 2023 and May 2024, the CEI growth rate remained unchanged—an improvement from a 0.6-per cent decline over the previous six-month period.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, whereas the CEI offers an indication of the current state of the economy.

“Large negative contributions from the yield spread and new orders for investment goods fueled LEI’s monthly decline. However, the other five components improved, and most of them have had a positive contribution to the Index over the past six months. As a result, the six-month growth of Germany LEI continued to improve, signaling that headwinds to growth have abated,” said Allen Li, associate economist at the think tank in a release.