10.04.2025 • 14/2025
In East Germany, as in the west, the economy is in crisis - Implications of the Joint Economic Forecast Spring 2025 and new data for the East German economy
In 2024, the economy in East Germany shrank by 0.1% and in Germany as a whole by 0.2%. The Halle Institute for Economic Research (IWH) expects stagnation for East Germany in 2025 and growth of 1.1% in 2026. According to the IWH forecast, the unemployment rate is expected to be 7.8% in both 2025 and 2026, after 7.5% in 2024.
Oliver Holtemöller
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10.04.2025 • 13/2025
Joint Economic Forecast 1/2025: Geopolitical turn intensifies crisis – structural reforms even more urgent
The German economy will continue to tread water in 2025. In their spring report, the leading economic research institutes forecast an increase in gross domestic product of just 0.1% for the current year. For 2026, the institutes expect gross domestic product to increase by 1.3%. In the short term, the new US trade policy and economic policy uncertainty are weighing on the German economy. The additional scope for public debt should gradually have an expansionary effect, but threatens to crowd out private consumption and private investment.
Oliver Holtemöller
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13.03.2025 • 10/2025
A turning point for the German economy?
The international political environment has fundamentally changed with looming trade wars and a deteriorating security situation in Europe. The leading parties in Germany are setting the stage for debt-financed additional defence tasks with far-reaching changes to the debt brake. This entails major risks for the German economy, but also opportunities. Meanwhile, the economy continues to be in a downturn. According to the spring forecast of the Halle Institute for Economic Research (IWH), gross domestic product (GDP) in 2025 is likely to be roughly the same as in the previous year, and it will not increase significantly until 2026, partly because uncertainty about German economic policy is likely to decrease after the new government is established, meaning that the savings rate of private households will fall again somewhat and the debt-financed additional government spending will gradually have an impact on demand. The IWH economists are forecasting an increase in GDP of 0.1% for 2025. In December, they were still forecasting growth of 0.4% for 2025. The outlook is similar for East Germany, where production is likely to have increased slightly in 2024, unlike in Germany as a whole.
Oliver Holtemöller
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12.03.2025 • 9/2025
IWH präsentiert neues Prognose-Dashboard zur deutschen Wirtschaft
Das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) stellt ein umfassendes Daten-Tool bereit, das einen interaktiven Vergleich unterschiedlicher Prognosen für die Wirtschaftsentwicklung in Deutschland erlaubt. Entscheider aus Politik und Wirtschaft sowie Interessierte aus Medien, Wissenschaft und Öffentlichkeit können das IWH Forecasting Dashboard kostenfrei nutzen.
Oliver Holtemöller
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IWH-Flash-Indikator I. und II. Quartal 2025
Katja Heinisch, Oliver Holtemöller, Axel Lindner, Birgit Schultz
IWH-Flash-Indikator,
No. 1,
2025
Abstract
Die deutsche Konjunktur hat zum Ende des Jahres 2024 einen weiteren Rückschlag erhalten. Das Bruttoinlandsprodukt (BIP) sank im vierten Quartal 2024 um 0,2%. Es ist damit seit Mitte 2022 auf einem leicht sinkenden Trend (vgl. Abbildung 1). Wenngleich staatliche und private Konsumausgaben zugelegt haben dürften, konnten diese die deutlich gesunkenen Exporte nicht kompensieren. Damit ging auch die Wirtschaftsleistung im Jahr 2024 insgesamt um 0,2% zurück.
In den Unternehmen hat sich die Lage zuletzt anscheinend stabilisiert, die Erwartungen verschlechtern sich jedoch weiter. Die Risiken, die von der US-Wirtschaftspolitik ausgehen, dürften die Investitionsbereitschaft der Unternehmen bremsen. Das senkt nicht nur gegenwärtig die Chancen auf eine konjunkturelle Erholung, sondern wirkt auch mittelfristig hemmend auf das Produktionspotenzial. Alles in allem wird wohl das Bruttoinlandsprodukt (BIP) laut IWH-Flash-Indikator im ersten Quartal 2025 nur wenig um 0,2% und im zweiten Quartal um 0,3% zulegen.
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16.01.2025 • 3/2025
Medium-term projection for the German economy and scenarios for achieving the targets of the Climate Protection Law
The potential growth rate of the German economy is declining. According to the medium-term projection of the Halle Institute for Economic Research (IWH), potential output is likely to increase by an annual average of just 0.3% in the medium term (2023-2029). The target of climate neutrality by 2045 is likely to be missed by a wide margin without further emission-reducing measures. It could be achieved by means of higher CO₂ prices at significantly lower macroeconomic costs than by means of non-market-based regulatory measures.
Oliver Holtemöller
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12.12.2024 • 31/2024
Frosty prospects for the German economy
The German economy will continue to stagnate in winter 2024/2025. Industry is suffering from a loss of international competitiveness. For this reason and due to the unclear economic policy outlook, firms and consumers are holding back on spending, although incomes have increased recently. Consumer spending will only increase more strongly once the uncertainty subsides. According to the winter forecast of the Halle Institute for Economic Research (IWH), gross domestic product in Germany is expected to fall by 0.2% in 2024 and to expand by 0.4% in 2025. In September, the IWH forecast had still assumed a zero growth in 2024 and a growth of 1.0% in 2025. In East Germany, gross domestic product will increase by 0.5% both this year and in 2025.
Oliver Holtemöller
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IWH-Flash-Indikator IV. Quartal 2024 und I. Quartal 2025
Katja Heinisch, Oliver Holtemöller, Axel Lindner, Birgit Schultz
IWH-Flash-Indikator,
No. 4,
2024
Abstract
Der deutsche Konjunkturmotor stottert weiter vor sich hin. Obwohl das Bruttoinlandsprodukt (BIP) im dritten Quartal 2024 um 0,2% zunahm, liegt es immer noch unter dem Niveau vom ersten Quartal 2024, da das zweite Quartal nach neuesten Zahlen weitaus schwächer ausgefallen ist als zuvor gemeldet (vgl. Abbildung 1). Der leichte Zuwachs im dritten Quartal dürfte dabei vor allem auf gestiegene staatliche und private Konsumausgaben zurückzuführen sein. In den Unternehmen ist die Stimmung weiterhin trüb und die wirtschaftspolitische Unsicherheit dürfte weiterhin hoch bleiben. Zudem belasten nach wie vor gestiegene Energie- und Lohnkosten die Investitionsbereitschaft der Unternehmen. Alles in allem dürfte das Bruttoinlandsprodukt (BIP) laut IWH-Flash-Indikator im vierten Quartal 2024 stagnieren. Für den Jahresbeginn 2025 deuten allerdings die Frühindikatoren auf eine Belebung der wirtschaftlichen Aktivitäten und einen Anstieg des BIP um 0,4% hin. Diese reflektieren jedoch noch nicht die jüngsten politischen Ereignisse in den USA und in Deutschland.
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26.09.2024 • 27/2024
Services stabilise the East German economy – Implications of the Joint Economic Forecast Autumn 2024 and of Länder data from recent publications of the Statistical Offices
In 2024, the East German economy is expected to grow by 0.2%, while it will decline by 0.1% in Germany as a whole. The Halle Institute for Economic Research (IWH) is forecasting an East German growth rate of 0.7% in 2025, and a rate of 1.2% in 2026. According to the IWH forecast, the unemployment rate in eastern Germany is likely to be 7.5% in 2024 as well as 2025 and 7.2% in 2026.
Oliver Holtemöller
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26.09.2024 • 26/2024
Joint Economic Forecast 2/2024: German economy in transition ‒ weak momentum, low potential growth
The Joint Economic Forecast Project Group forecasts a 0.1% decline in Germany's gross domestic product in 2024. Looking further ahead, the institutes expect a weak recovery with growth of 0.8% (2025) and 1.3% (2026). Compared to the spring forecast, this represents a down-ward revision of 0.2 (2024) and 0.6 (2025) percentage points. “In addition to the economic downturn, the German economy is also being weighed down by structural change,” says Dr Geraldine Dany-Knedlik, head of Forecasting and Economic Policy at the German Institute for Economic Research (DIW Berlin). “Decarbonisation, digitalisation, and demographic change – alongside stronger competition with companies from China – have triggered structural adjustment processes that are dampening the long-term growth prospects of the German economy.”
Oliver Holtemöller
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