New HWWI Business Cycle Forecast
The Hamburg Institute of International Economics (HWWI) has updated its forecast for economic development in Germany. So far, the German economy has come through the crises better than feared. Although the German economy has slipped into a recession in the winter half-year following slight growth until the fall of 2022, this is likely to be only moderate and a moderate recovery is expected from early summer.
Under these conditions, the HWWI expects zero growth on an annual average for 2023; in 2024, the economy could grow noticeably again at just under 2%. The rise in consumer prices is still high at almost 9% at present, but energy and other commodity prices, which have already fallen significantly, are expected to fall considerably in the near future. The inflation rate could fall below 4% by the end of this year and approach the 2% stability mark again by the end of 2024. It is important that excessive wage settlements do not trigger a cost-price spiral. Monetary policy could then also end its restrictive course.
“Germany has so far been spared a massive recession and there is reason to hope that this will remain the case. However, for inflation to fall and the economy to pick up, the geopolitical situation must not deteriorate any further,” says Prof. Dr. Michael Berlemann, Scientific Director of the HWWI.
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Prof. Dr. Michael Berlemann