Frühsommer 2023: Konsumschwäche wird allmählich überwunden
Overall economic demand in Germany remains weak. In the first quarter, GDP decreased by 0.3% compared with the previous quarter. This was mainly due to a sharp decline in consumption. With inflation remaining high at the start of the year and real incomes falling as a result, households are cutting back on consumption. In addition, government consumption also fell sharply by -4.9% compared with the previous quarter. The main reason for this appears to be the expiry of the Corona measures. No fundamental revival of the overall economy is expected in the current second quarter. However, a number of indicators suggest that GDP will not decline further. The economy is likely to pick up somewhat in the second half of the year. An important prerequisite for this is that inflation continues to weaken significantly and private households gradually abandon their reluctance to spend. On average, GDP is expected to decline by 0.3% this year. A stronger recovery, especially in private consumption, is not expected until real incomes rise. In 2024, GDP will probably expand by 2.0%. Employment growth continued at the beginning of 2023. The increase in the workforce was particularly pronounced in the first quarter of 2023, with a seasonally adjusted increase by 150 thousand people. However, the IAB labor market barometer and also the number of registered jobs point to a slowdown. The weak economy has also resulted in an increase in registered unemployment, which is expected to be strongest in the second quarter. The unemployment rate is expected to rise to 5.6% and fall again to 5.3% by the end of the forecast period. Consumer price inflation has slowed since the beginning of the year. It is worth noting that the core rate of inflation also decreased significantly in May. However, the significantly higher wage settlements of late are likely to contribute to a some-what slower decline in the inflation rate, especially in the coming year. Overall, consumer prices are expected to rise by an average of 5.5% this year. Next year inflation is then ex-pected to be 2.0%. At just over EUR 50 billion, the general government budget deficit in the current year is expected to be significantly lower than last year (EUR 106 billion). Govern-ment revenues will increase only moderately, mainly due to the weak development of tax revenues. Government spending is expected to increase only slightly due to the absence of special effects such as the "inflation premiums" and the takeover of gas importers. At the same time, subsidies due to the "gas and electricity price brakes" are experiencing a strong increase, as are interest payments made. In the coming year, the general government deficit will fall to just under EUR 18 billion.
Schmidt, T., G. Barabas, N. Benner, B. Blagov, M. Dirks, N. Isaak, R. Jessen, F. Kirsch and P. Schacht (2023), Frühsommer 2023: Konsumschwäche wird allmählich überwunden. RWI Konjunkturberichte, 74, 2, 35-68