The economic contraction in Germany could continue in 2024

The Authority considered that various companies are postponing their investments for fear of risk, and attributed the state of uncertainty, among other reasons, to the reduction of the general budget for next year, the rise in interest rates, and the situation of the global economy.

For 2024, calculations indicate a 0.5% decline in GDP and “in the worst case there could be a 1% decline,” the analysis noted.

IW Institute Director Michael Huther believes that “poor conditions in global trade are not the only reason for the ongoing recession.” He said that the German government “played a decisive role in this crisis.”

A survey released on Wednesday also showed signs of citizen anxiety, estimating that economically active residents have less confidence in the possibility of using their homes as economic reinsurance in old age.

At the peak of 2020, 51 per cent still believed that reaching the “private cap” was the most reliable forecast, but the proportion has gradually fallen to 42 per cent, according to a YouGov demographic analysis commissioned by the insurer HDI.

“In addition to the increased benefits and costs of renovation and construction, which are currently affecting the construction sector, it is clear that concrete’s reputation as a means of providing for the needs of older people is also suffering, especially among most young people.” said HDI Germany CEO Jens Warkentin.

However, the study revealed that homeownership still ranks among the most reliable ways to stay solvent after retirement.

At least today, the main clouds surrounding the 2024 federal budget have cleared, after the announcement of the agreement between the leaders of the government coalition.

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Final approval would lead to higher prices for heating using fossil fuels, as well as the cancellation of an initially planned €1 billion subsidy for electricity grid prices, among other cuts.

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