According to initial data from the Federal Statistical Office, the German economy started 2024 with a small plus, but the initial situation has not fundamentally changed as a result. On the one hand, the Federal Statistical Office has revised the fourth quarter of 2023 and thus the “statistical overhang” downwards, and on the other hand, the increase in the first quarter is not least due to a weather-favoured increase in the construction industry, which is actually crisis-ridden. In view of the structural problems that have not yet been resolved, the Hamburg Institute of International Economics (HWWI) therefore expects only a moderate upturn for the German economy in 2024 and 2025 and economic growth of only 1/4% and 1% on average.

The increase in consumer prices has now slowed to below 2 1/2% and is now close to the stability target. Prices on the upstream stages are still declining compared to the previous year, but the decline seems to have stopped since the beginning of this year. This and the noticeably rising wages are likely to slow down the further disinflation process. For example, the rate of increase in the cost of living index is expected to average just over 2% this year as well as next year.

These forecasts are subject to a relatively stable global economic situation. However, the current geopolitical uncertainties entail risks for trade flows and world market prices, not least for energy. But “domestic” economic policy is also still called upon to improve the framework conditions for the economy.