Economic researchers expect private consumption to fall slightly this year, by 1.0 percent, due to the rise in prices. “Loss of purchasing power caused by inflation are causing problems for many households,” said the Institute for Macroeconomics and Business Cycle Research (IMK) of the trade union-affiliated Hans Böckler Foundation on Thursday. For 2024, however, the economists expect a relaxation and an increase in private consumption by 1.4 percent.
According to the IMK, the average inflation rate will be 5.3 percent this year after 6.9 percent in 2022. “However, the upward trend in prices will decrease over the course of the year,” the researchers predict. For 2024 they expect an inflation rate of 2.4 percent.
The Institute assumes that the number of unemployed will increase by almost 100,000 people, so that an annual average of almost 2.52 million people will be unemployed. “This corresponds to a rate of 5.4 percent, an increase of 0.1 percentage points compared to 2022.” Around 2.49 million unemployed are expected for 2024, which corresponds to a rate of 5.3 percent again.
Forecast for economic growth raised slightly
The institute slightly raised its annual forecast for economic growth. In December, the IMK was still expecting a decline in gross domestic product (GDP) of 0.3 percent for the current year, but it is now assuming 0.0 percent, i.e. stagnation. The IMK issued a forecast for 2024 for the first time: According to this, GDP should increase by an average of 1.2 percent.
In view of the war in Ukraine, the increasing tensions between the USA and China and the turbulence on the financial markets, the uncertainty is very great. At the same time, the prospects have brightened significantly since the end of last year, it said. The German economy was supported by a modestly recovering global economy, high levels of orders in hand in industry and the slow start of the conversion to a CO2-neutral economy. (dpa)