As of: February 20, 2024, 10:12 p.m
By: Amy Walker
Comments
Press
Split
Weak growth, even a possible recession: the mood in the economy is bad right now.
But an economist from the USA has a completely different view of the situation.
Berlin – Economists in Germany are generally not in a particularly good mood at the moment, at least with regard to current economic performance.
After a decline in gross domestic product (GDP) at the end of 2023, economic output could fall slightly again in the first quarter of 2024, as stated in the Bundesbank's current monthly report.
If GDP shrinks for two quarters in a row, economists speak of a so-called technical recession.
“A recession in the sense of a significant, broad-based and long-lasting decline in economic output cannot yet be determined and is not currently expected,” the experts wrote.
Weak growth also forecast in 2024
The Bundesbank also assumes that consumers' desire to spend will pick up again in view of a "stable labor market, sharply rising wages and a decreasing inflation rate".
At the beginning of the current year, consumers probably continued to hold back on spending.
Private consumption had already ceased to be an important economic support by the end of the year.
According to preliminary data from the Federal Statistical Office, overall economic output shrank by 0.3 percent in the fourth quarter compared to the previous quarter.
In its forecast published in mid-December, the Bundesbank predicted economic growth of 0.4 percent for Germany in 2024 following a decline in economic output last year.
In the medium term, the Bundesbank expects slightly stronger growth of 1.2 percent in 2025 and 1.3 percent in 2026.
For many politicians and economists, such low growth rates are cause for concern - which is why there is currently so much discussion about how the country's economy can be properly stimulated again.
Both Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) are concerned about the competitiveness of Germany as a business location - but are calling for very different measures to get the situation under control.
Economist: “We are pretty full and satisfied”
Meanwhile, Chancellor Olaf Scholz (SPD) has been increasingly optimistic; the situation is being talked about as worse than it is, according to the tenor from the Chancellery.
And according to an economist from the USA, the Chancellor could be right.
In an interview with the
Süddeutsche Zeitung
he asserts: “A stagnating economy is a sign of success.”
Dietrich Vollrath from the University of Houston in the US state of Texas bases his view on the fact that GDP can no longer grow as much as it used to because the quality of many products sold is becoming increasingly better, but at the same time cheaper.
Consumption therefore plays a smaller role in wealthy economies than in emerging economies.
“We've reached a point where we're pretty full and happy with what we have.
This applies even to billionaires like Jeff Bezos, Bill Gates or Warren Buffett.
They each have perhaps ten houses and therefore perhaps 20 refrigerators.
But the point is: Even though they have x times as much money as me, they don't have x times as many refrigerators, just fewer," says Vollrath.
My news
Pension increase in summer 2024: Heil gives the first forecast for pensioners
Next real estate insolvency: Construction crisis is dragging more and more companies into the abyss
Pension in the event of occupational disability only possible for two years read
“Not an issue”: Heil talks about the future of mini-job reading
Bavaria lawsuit against state financial equalization: “Threatening the existence” of states like Bremen and Berlinlesen
German mechanical engineer relocates jobs to other European countries read
Consumer sentiment is brightening somewhat in Germany © Westend61/Jake Jakab/Imago
That's why wealthy countries shouldn't worry too much about small GDP figures - as long as the economy continues to grow generally, even if not as quickly as before, that's a good sign.
“It is our privilege that slow growth is okay.
We can do other things with our time, with our resources.
For example, protecting the climate.” It is precisely this prioritization that is a central challenge for politicians, the economist continues in the
SZ
.
Because without strong growth, the pie to be distributed will not grow larger - so a decision must be made as to where and which resources would be used.
This is exactly what the traffic light coalition is now arguing about - and is threatening to be torn apart by the distribution battle.
A new concept should be in place by spring to strengthen the location.
With material from dpa