The Hamburg Institute of International Economics (HWWI) expects real gross domestic product to decline by 0.3% in 2023 as the current weakness of the economy continues in the final quarter. The savings in the state budget expected after the Federal Constitutional Court ruling are likely to slow down the real recovery in the coming year. Economic growth of only ½ % is therefore expected for 2024. Only in 2025 can a slightly more significant increase in real gross domestic product of 1% be expected again – without further setbacks.

Inflation has fallen significantly this year, from more than 8% at the beginning of the year to 3.2% most recently. However, the noticeably rising labor costs will slow down the further disinflation process. After an average inflation rate of 6% this year, the cost of living index is now expected to reach 2¾% in 2024. It will only approach the 2 percent mark again in 2025.

The forecast assumes that the Middle East conflict and other geopolitical crises will not escalate further. Otherwise, especially given the current relatively weak global economy, we would have to expect a global economic crisis similar to previous phases of this kind.