Investigate facilities. - Economists detect glimmers of hope in the economic downslide.
According to economic experts, Germany's economy is slowly bouncing back from the economic downturn. Research institutions have released their most recent predictions, which are slightly more positive than in the spring.
"There's a glimmer of hope at the end of the tunnel of the economic crisis," said Moritz Schularick, President of the IfW Kiel. "The indications are growing that the German economy can break free from the recession." Last year, Europe's most significant economy plunged into a recession, resulting in a 0.2% decrease in GDP. However, specialists on the German economy are still skeptical about significant progress this year.
The German economy is predicted to primarily depend on the recovery of exports and a rebound in private consumption. Increasing wages and falling inflation rates could encourage people's desire to spend.
The labor market is predicted to remain solid. IfW Kiel anticipates a 0.2% increase in economic output this year (spring forecast: 0.1%). However, there are no indications of significant economic dynamism. In 2025, a 1.1% economic growth (spring forecast: 1.2%) is predicted. The inflation rate is expected to level off at around 2% after an average of 5.9% the previous year.
The RWI - Leibniz Institute for Economic Research in Essen is somewhat more optimistic and has raised its growth forecast for 2024 from 0.3 to 0.4 percent. The economic recovery is predicted to gain more traction in the coming quarters, although there are still uncertainties regarding how energy prices and economic policy will develop. For the forthcoming year, a 1.5% increase in economic output is predicted.
The Leibniz Institute for Economic Research in Halle (IWH) sees primary hazards for the export-oriented German economy in the potential for a tariff war. The EU Commission has threatened provisional tariffs on electric cars from China. Beijing could respond with its own tariff increases. Automakers, in particular, would be affected, as well as by European tariffs on vehicles produced by German businesses in China for the European market. Under such circumstances, the chances for a growth in German exports would be limited. This year, the IWH expects a 0.3% increase in GDP (spring forecast: 0.2%). For the coming year, the institute predicts unchanged growth of 1.5%.
