Economic situation - Economics Minister with cautious economic expectations for 2024
Thuringia's Economics Minister Wolfgang Tiefensee expects only modest economic development in 2024 in view of economic risks. The economy will remain in difficult waters in the new year, the SPD politician said in response to a dpa inquiry in Erfurt. The economic research institutes' forecasts fluctuated between minus 0.5 and plus 0.9 percent. "This already shows the great uncertainty for the further development. For Thuringia, I also only expect slight growth just above zero for 2024."
Risks slow down economic development
High interest rates and difficult financing conditions are slowing down global demand for industrial goods. The consumer climate in Germany has cooled. High energy prices continue to weigh on companies. The automotive and chemical industries, two driving forces of the German economy, have also lost competitiveness. In Thuringia, the automotive supply industry has been a sales heavyweight to date.
But there are also rays of hope: inflation is falling, the situation on the Thuringian labor market is stable and the energy supply is secure.
Demands on the federal government
Tiefensee reiterated his expectations of the federal government's economic and financial policy. There should be a focus on investment. "The federal government must quickly and bindingly create the necessary incentives and framework conditions for the expansion of renewable energies and the hydrogen economy," said the Minister. He described the removal of the federal subsidy to stabilize grid fees as counterproductive, as it makes electricity more expensive and offsets the relief provided by the reduction in electricity tax.
Tiefensee also called once again for a reform of the debt brake - the existing provision in the Basic Law would have to be supplemented by a "future investments" clause. "Borrowing would then still be possible for important future issues such as combating climate change, even outside of emergencies."
Economic output slightly in the red in 2023
He cited demographics, moving away from fossil fuels and digitalization as challenges in Thuringia. "In order to overcome them, considerable financial efforts are required, which we cannot manage without the federal government."
In the first half of 2023, economic output in Thuringia fell by 0.6 percent - compared to the national average of 0.3 percent. Figures on the development of gross domestic product (GDP) for the entire past year are not yet available. The unemployment rate was 5.8% in November 2023, 0.4 percentage points higher than a year ago.
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The Federal Government's economic and financial policy is a focus for Thuringia's Economics Minister Wolfgang Tiefensee, who believes investment incentives and framework conditions should be established for renewable energy and hydrogen economy expansion. The chemical industry in Germany, along with the automotive sector, has faced challenges due to high interest rates, difficult financing conditions, and high energy prices. Despite these challenges, Tiefensee remains hopeful about Thuringia's economic development, citing stable labor market situations and secure energy supply as rays of hope. The SPD politician expects only moderate economic growth for Thuringia in 2024, with economic risks still prevalent, as reflected in the fluctuating forecasts from research institutions. The automotive supply industry in Thuringia, a sales heavyweight, has also been affected by these challenges.
Source: www.stern.de
