2024-09-06 18:05:15
Germans currently save 10.8 percent of their disposable income
The German Institute for Economic Research (DIW) revised its economic forecast for the current year downward.
Instead of a slight increase in gross domestic product of 0.4 percent this year, economic researchers now expect it to stagnate at zero percent.
“The hopes for the recovery of the industry that we had at the beginning of the year did not materialize. Individual consumption is also weaker than we initially expected,” said the economic director of the Institute for Economic Research Geraldine Dany-Knedlik, quoted by BTA.
Consumers still prefer to put their money into savings accounts rather than spend it, she noted. Germans currently save 10.8 percent of their disposable income. In the US, savings amounted to 2.9 percent of disposable income in August, DPA notes.
Three other leading economic research institutes also recently significantly lowered their forecasts for Germany.
The Ifo Institute (ifo) in Munich and the Leibniz Institute for Economic Research in Halle (IWH) are also already forecasting zero economic growth for this year. Until recently, Ifo’s forecast was for a growth of 0.4 percent.
However, the Institute for Economic Research forecasts growth of 0.9 percent next year and 1.4 percent in 2026, driven by increased consumption. Economic researchers explain this primarily with the significant rise in real wages in Germany.
There are also positive signs in foreign trade and investment as a result of the change in interest rates initiated by the European Central Bank in June.
The Institute for Economic Research notes that global economic risks still remain, including the re-election of Donald Trump as US president or a further escalation of the wars in Ukraine or the Middle East.
Domestic problems can also severely affect the economy, the institute said. One risk factor, for example, is the continued electoral rise of the far-right Alternative for Germany party.