The DIW research institute recently revised its economic forecast downwards, and now researchers at the Böckler Foundation are doing the same. At least the dark economic sky is brightening somewhat.
According to experts, the German economy is stagnating this year. The Hans Böckler Foundation published its economic forecast for 2024, according to which gross domestic product will stagnate – the experts therefore expect zero growth. They thus lowered their previous estimate by 0.1 percentage points. The economic researchers attributed this year’s stagnation to, among other things, subdued demand from abroad and the state’s restraint in spending.
Previously, other institutes had already reached the zero percent forecast, including the German Institute for Economic Research (DIW). Now the Institute for Macroeconomics and Business Cycle Research (IMK) of the Böckler Foundation, which has close ties to the trade unions, has given its assessment, according to which the economy will stagnate on average for the year as a whole, but will at least brighten somewhat by the end of the year.
Things will get better in 2025
Things will improve somewhat in the coming year, with the IMK expecting German economic output to increase by 0.7 percent in 2025 – this is due to relatively high wage agreements, which will bring more money into the coffers of employees and make them more willing to spend. Inflation is also no longer causing as much concern as it did some time ago.
However, next year will not be all sunshine and roses either: The IMK had originally expected economic growth of 0.9 percent in 2025, but now the experts are somewhat less optimistic and have reduced their expectations by 0.2 percentage points.
In order to stimulate the economy, Sebastian Dullien of the IMK is calling for “an economic policy turnaround with extensive and continuous investments in renewable energies, networks, transport infrastructure and education, among other things.” Additional investments totaling 600 billion euros are needed within ten years. The federal government’s growth initiative contains little concrete information.
Source: Stern
