Jahresende 2024: Konjunkturelle Schwäche verstärkt strukturelle Belastungen in der Industrie
The German economy lost ground again in the summer. Exports in particular re-mained weak, lagging behind global trade. Correspondingly, investments have also fallen again. Companies are suffering from low demand, with the result that order backlogs are dwindling and capacity utilisation is low. This applies in particular to the automotive and energy-intensive industries. On the other hand, private con-sumption increased quite significantly by 0.3% compared to the previous quarter. Private households appear to be gradually perceiving their rising real incomes, implying that they are prepared to increase their spending again. The stagnation in production is accompanied by increasing job losses in industry. Sofar, however, they have not been greater than in previous periods of economic weakness. It is likely, that many companies are trying to retain their employees for longer than in previous periods of weakness in view of the increasing shortage of skilled labor. In addition, the loss of jobs in industry has so far been compensated by the creation of new jobs in the service sector. As a result of the break-up of the government coalition and the new elections, it is to be expected that economic policy uncertainty, which has already been significantly higher in Germany than in many other countries for some time, has increased again recently. The lack of clarity regarding the future economic policy course of the US administration is also likely to contribute to an increase in overall economic uncertainty. The economic weakness is likely to persist until the spring of next year. Only when it becomes clearer how the economic policy course will be set on both sides of the Atlantic will uncertainty decrease. Against this backdrop, we expect another slight decline in GDP at the end of the year. On average, GDP will fall by 0.2% this year. We expect production to pick up slightly over the course of the coming year. The expected decline in macroeconomic uncertainty should lead to a somewhat stronger increase in domestic demand. Private consumption will also be supported by rising real disposable income. As interest rates continue to fall, investments are also likely to gradually increase again. GDP is expected to rise by an annual average of 0.6% in the coming year. GDP is expected to expand by 1.3% in 2026. For the time being, we don’t expect employment to increase. Unemployment is only likely to fall slightly over the course of the coming year. The unemployment rate is expected to rise from 6.0% in 2024 to 6.1% and to fall in the following year and to 5.9% in 2026. In the current year, the general government deficit is likely to remain at around the same level as the previous year at just under €107 billion. Next year, it is likely to fall to just over €87bn. For the year 2026, we again expect a slightly higher deficit of just under €92bn.
Schmidt, T., N. Benner, B. Blagov, E. Coschignano, M. Dirks, N. Isaak, R. Jessen, F. Kirsch, S. Kotz and C. Krause (2024), Jahresende 2024: Konjunkturelle Schwäche verstärkt strukturelle Belastungen in der Industrie. RWI Konjunkturberichte, 75, 4, 32-67