shallow focus photograph of black and gray compass
HWWI Forecasts

HWWI Konjunkturprognose Deutschland, Spring 2024

Michael Berlemann, Jörg Hinze (2024),
HWWI Forecasts, No. 1/2024, Hamburg Institute of International Economics.

Following a 0.3 % decline in real gross domestic product in 2023, the Hamburg Institute of International Economics (HWWI) expects only limited recovery potential for the German economy in 2024 and 2025. In view of the difficult start to the year and the resulting depressed starting level, economic growth is only expected to average ¼ % in 2024, even with a moderate economic upturn over the remainder of the year. However, even this assumes that the geopolitical conflicts do not escalate further. And even then, given the structural problems in Germany, real gross domestic product is only expected to increase by 1 % in 2025. By contrast, the price outlook has improved significantly.

Inflation has already fallen considerably over the course of 2023. And despite noticeably rising labor costs, which are slowing down the further disinflation process, the rate of increase in the cost of living index is expected to approach the 2 % mark again this year and next, at 2 ¾ % and 2 ¼ % respectively.

These forecasts are based on the premise that the geopolitical and therefore also the global economic situation does not deteriorate further and that economic policy decides on suitable measures to improve the domestic framework conditions for the economy.