DIW economic barometer
Weak results for the German economy at the end of the year
The situation in the German economy remains tense at the end of the year. There is a lack of orders in industry and consumers remain cautious. There are only a few bright spots.
The German economy can look back on a weak year in 2024. Industry, the service sector and the manufacturing sector also weakened in the last quarter, as shown by the current economic barometer from the German Institute for Economic Research (DIW). Experts estimate that economic output may have declined.
Exports and domestic demand remain weak. Political uncertainty as a result of Donald Trump’s re-election as US President is further dampening the mood among companies. “In particular, the future trade policy of the USA is difficult to estimate,” said DIW economics director Geraldine Dany-Knedlik. There are fears of tariff increases for at least some imports from the EU.
Job losses are causing consumer restraint
Despite the fall in inflation, consumers remain cautious. Service providers in particular feel this. “There are job losses, especially in the manufacturing sector, which in itself dampens private consumption,” it said.
One of the few bright spots are the interest rate cuts by the European Central Bank, which could provide some support for the German economy in the coming year, it was said.
dpa
Source: Stern
