Leibniz Institute - Economic forecast: exports and consumption weak
The German economy is continuing its downturn this winter. According to the economic forecast published by the Leibniz Institute for Economic Research Halle (IWH) on Thursday, parts of industry have lost competitiveness and incomes have fallen due to inflation in 2023. For the coming spring, the economic researchers expect real incomes and exports to rise again, resulting in a slight upturn. However, the German economy has not yet returned to its old growth path following the end of the pandemic.
According to the IWH, the automotive industry in particular has suffered significant losses as a result of the switch from combustion engines to electric motors. The chemical industry, which is particularly strong in Saxony-Anhalt, also suffered a setback due to higher energy prices in Europe.
"There are no signs of an improvement in the economy for the winter," said Oliver Holtemöller, Head of the Macroeconomics Department and Vice President of the IWH. "However, consumption will be supported by rising real wages again in the course of 2024 and the German export industry should benefit from the fact that international demand for manufacturing goods is also likely to gradually pick up again."
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The economic forecast for Saxony-Anhalt, a region in Germany, also shows a challenging economic situation, with the chemical industry being impacted by higher energy prices. Despite the expected upturn in real incomes and exports for the spring, the German economy is still recovering from the downturn caused by the pandemic and inflated prices. The Head of the Macroeconomics Department at the Leibniz Institute, Oliver Holtemöller, mentioned that consumption will be supported by rising real wages in 2024, potentially helping to improve the overall economic situation.
Source: www.stern.de
