Economists release spring projection. - Expert criticizes traffic lights
The five leading German economic experts have released their spring report, unveiling their predictions for the country's economy. On Wednesday, they officially presented their findings.
The report suggests that the German economy will only experience a minor growth of 0.2% this year. This is a significant downgrade from the earlier assumption of 0.7% growth. This is a major blow to the government, as Germany remains at the bottom of the chart for leading industrial nations.
Here's what the experts predict for:
Economy
The German economy is expected to grow by 0.9% next year.
Jobs
The structurally challenging labor market in Germany is worsening thanks to demographic changes and declining average working hours. Vacancies are difficult to fill, and promised policies on pensions and benefits are further complicating matters.
Prices and wages
Inflation in Germany will slow down further. The German Council of Economic Experts predicts inflation rates of 2.4% and 2.1% in 2024 and 2025 respectively. Despite rising labor costs and low productivity, the overall decline in inflation is expected to continue. However, real wages are anticipated to recover, which should lead to an increase in consumption. Yet, there are concerns due to the global geopolitical situation that could affect this prediction.
Prof. Veronika Grimm notes: "The slowdown in inflation allows real wages to recover, which will lead to a consumption recovery. There's a catch, though. The geopolitical situation creates uncertainties, and it's unclear if inflation will continue to decline or bounce back."
Transport
On Wednesday, the Expert Council will publish a report on decarbonizing freight transport. However, the five-member Council of Experts does not agree on the approach.
Four of the Council members support focusing on the electrification of freight transport, while Prof. Veronika Grimm holds a contrasting view. Their beliefs will be disclosed in the report being presented.
Read also:
Source: symclub.org
