Handelsbatt: German economy will remain stagnant in 2024
The German economy has not yet surpassed the pre-Corona level of 2019 and will only struggle to break free from stagnation in the future. This is the result of new economic forecasts from the Handelsblatt Research Institute (HRI) .
As in the autumn forecast, the HRI expects growth of only 0.3% for the new year, while in 2025 the economy is expected to grow by 0.6%. This makes the HRI much more pessimistic than other economic research institutes , which see growth of between 0.5 and 0.9 percent for 2024 and at least 1 percent for 2025.
“After the technical recession in the second half of 2023, a dynamic recovery is not expected in the new year either,” says Bert Rürup, chief economist at Handelsblatt. “Growth rates of just 0.1 or 0.2% per quarter will likely become the new norm.”
The hopes of some economists and politicians for a notable recovery starting from the beginning of the summer are unlikely to be realized. The banking association now predicts “close to zero” growth for next year too. Deutsche Bank even assumes a slight decline in economic output of 0.2%. Reality risks not being so optimistic.
The causes of the German slowdown are known:
- first of all the lack of investments , especially in recent years, and this is easily noticeable if we examine the formation of German gross invested capital compared to that of the USA. Post Covid, Germany stopped investing, due to the famous "Debt Ceiling", which slows down public investments, combined now with the decline in family investments due to the explosion of the real estate bubble.
- The bureaucratic monster of controls created by the energy transition, which slows down corporate growth and investments;
- The definitive end of cheap energy, after the breakdown of relations with Russia due to the conflict in Ukraine;
- The structural problems of Germany, which it shares with many European countries, from the point of view of demographics and the creation of an adequate workforce base.
The German government, divided and confused about solutions, does not seem capable of finding serious solutions, while protests from farmers and also from the social partners are becoming increasingly stronger.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Handelsbatt: the German economy will remain in stagnation also in 2024 comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/handelsbatt-leconomia-tedesca-restera-in-stagnazione-anche-nel-2024/ on Wed, 10 Jan 2024 09:00:42 +0000.