German economy in serious crisis – financial experts are calling for a quick change of course

German economy in serious crisis – financial experts are calling for a quick change of course

According to a report from www.welt.de, leading business associations paint a pessimistic picture for the German economy in 2024. They warn of an economic slowdown, interest rate hikes, a weakening global economy and uncertainty after the budget compromise. The prospects of an early economic recovery are slim, with forecasts for only mini-growth next year.

The institutes and the federal government expect a decline in economic output in 2023 as a whole, and leading research institutes have significantly lowered their forecasts for the coming year. The uncertainty and lack of planning means that companies are holding back on investments. This could lead to a further decline in economic output.

According to a survey by the employer-related German Economic Institute (IW), many large industries are pessimistic about the coming year. The weakness of the global economy, interest rate increases and uncertainty about the federal budget are depressing the prospects for 2024. The expectations of the business associations surveyed are also negative, with 23 of 47 sectors expecting a decline in production or business.

The presidents of German employers' associations are calling for a change of course and comparisons with Agenda 2010, which initiated far-reaching reforms in the social system and the labor market more than 20 years ago. A lack of planning security, high costs, pessimistic prospects and uncertainty create an unhealthy climate for the economy.

The consequences of this negative outlook could lead to further employment problems as companies could be forced to reduce staff. The economic downturn and uncertainty could also lead to Germany losing its global market share and the economy shrinking further.

Overall, this report points to a serious crisis in the German economy that needs to be urgently addressed. The demands for reforms and a change of course in economic and location policy are urgent in order to restore the trust of companies and create prospects for the future. This could have an impact on the entire market and the financial sector as investments are held back and economic growth stagnates.