Moderate economic growth in the world – German economy continues to stagnate
The recent moderate pace of the global economy will continue for the time being. In Europe, the economy is likely to pick up slightly from the winter half-year 2024/2025. In Germany, the sluggish export business in particular is providing a lack of economic impetus. However, private consumption will contribute to a slight economic recovery in the winter half-year. Gross domestic product is likely to stagnate in 2024 and grow by 1.0% in 2025.
05. September 2024
At the end of summer 2024, the recent moderate pace of the global economy appears to continue. Although concerns about the US economy led to severe turbulence on the financial markets at the beginning of August, positive news calmed the markets again shortly afterwards. The US Federal Reserve and the European Central Bank are likely to cut their key interest rates in September. Although fiscal policy in the advanced economies is slightly restrictive, the degree of restriction is likely to decrease. Global trade in goods, which has been stagnating for some time, has picked up again slightly since the spring. However, domestic demand in China is likely to remain weak, and the pace of expansion in the US is likely to slow, although the risk of a recession is not too high. The European economy is likely to pick up slightly in the winter half-year 2024/2025 as real wages rise.
Germany's gross domestic product fell slightly in the second quarter of 2024. For two years now, production has stagnated at roughly the same level as shortly before the outbreak of the pandemic. The weakness in gross fixed capital formation is particularly pronounced. The fact that fewer investments are being made is probably due in large part to the sluggish export business. Germany's share of global goods exports has fallen significantly since before the outbreak of the pandemic. It is a considerable blow to the German economy if the economic impetus no longer comes from successes in the export sector. The fact that the savings rate of private households has risen again slightly is probably mainly due to concerns about the economic future. However, real employee incomes are rising due to the relatively high wage and further slowdown in price momentum. A renewed upturn in private consumption in the winter half-year should therefore contribute to a slight economic recovery.
