Joint Economic Forecast for the German Economy #1-2024 – German Economy Ailing – Reform of the Debt Brake no Universal Remedy
The study contains a detailed short-term forecast up to the year 2025 as well as a medium-term projection of economic development up to the year 2028. The main topic deals with the significance of migration for growth and employment in Germany. The German economy is struggling. A phase of economic weakness that has persisted until recently is accompanied by dwindling growth forces. Economic and structural factors are thus overlapping in the sluggish overall economic development. Although a recovery is likely to set in from the spring, the overall momentum will not be very strong. With a time lag and in a weaker form, the basic economic pattern that the institutes drew in the previous fall report will continue to apply in the forecast period. In the current year, private consumption will become the most important driver of the economy. After the surge in inflation that set in from mid-2021 drastically reduced mass purchasing power for two years, real disposable incomes are now rising again significantly. On the one hand, the sharp rise in prices is continuing to recede and, on the other, higher wage settlements, which were initially only able to be adjusted to the high inflation with a delay, are now increasingly taking effect. In addition, monetary social benefits will again show a significant increase in real terms in both forecast years. This means that more purchasing power will flow to private households overall. While consumption-related drivers will therefore dominate this year, foreign business will increasingly drive the economy in the coming year.