The further economic outlook is overshadowed by these as well as the geopolitical uncertainties. After the “traffic light phase-out”, new elections are scheduled for February 2025, and a “new growth initiative” should be high on the agenda of the next government. It will take some time until the government is formed and until appropriate measures are implemented and have an effect. But then, from around the middle of 2025, the current lethargy in the German economy and the weak investment of companies could gradually be overcome. Until then, only private consumption is likely to support the economy. In addition, monetary policy easing should gradually contribute to stabilisation. Under these conditions, the HWWI expects economic growth of 1/2 % for 2025 and 1 1/2 % for 2026.

The inflation rate for consumer prices temporarily fell below the stability mark of 2% in late summer 2024. However, this was initially due to base effects and lower fuel prices. Recently, however, it has risen again to 2.2%. The so-called core rate of 3% and significantly higher labour costs continue to signal some inflationary pressure. Inflation rates are expected to remain slightly above 2% in the coming months before stabilising at 2% from mid-2025.

The uncertainties resulting from the new elections, as well as the uncertain future, rather protectionist trade policy of the USA and the ongoing geopolitical conflicts, contain some imponderables for these forecasts.