The economic outlook is gradually brightening

The Labour Institute for Economic Research LABORE published its autumn economic forecast on 19 September. According to the forecast, the economy will contract by 0.2% this year but return to a growth path next year (1.7%). These estimates still appear plausible.

This year, the economy is supported by net exports and public consumption, while investment and private consumption decline significantly. Expectations for next year’s more favourable development are based on a recovery in both investment and household consumption. Lower interest rates and slowing inflation improve households’ consumption capacity, while investment becomes more profitable.

Next year’s positive outlook is conditional on monetary policy easing and a gradual recovery in German industry. (AI translation)

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