Various companies are postponing their investments for fear of risks, said the company, which attributed the uncertainty to, among other things, the reduction in the national budget for the coming year, high interest rates and the state of the global economy.
For 2024, the calculations suggest a 0.5 percent decline in GDP and “in the worst case scenario, there could be a one percent decline,” the analysis says.
According to IW director Michael Hüther, “poor conditions in world trade are not the only reason for the ongoing recession”; The federal government “played a crucial role in this crisis,” he argued.
A survey released on Wednesday also indicated concern among citizens, estimating that the working population has less confidence in the ability to use home ownership as economic reassurance in old age.
At the peak of 2020, 51 percent still thought that reaching their “own upper limit” was the most reliable forecast, but the proportion gradually fell to 42 percent, according to the diagnosis of the demographic institute YouGov commissioned by the insurer HDI.
“In addition to the rise in interest rates and the renovation and construction costs that are currently burdening the construction industry, it is obvious that the reputation of concrete as a means of retirement planning is also suffering, especially among the youngest people,” said HDI Germany boss Jens Warkentin.
However, the survey found that home ownership remains the most reliable way to remain solvent after retirement.
Today at the latest, the biggest clouds surrounding the 2024 federal budget have cleared after an agreement was announced by the leaders of the government coalition.
Final approval would, among other things, lead to higher prices for heat from fossil fuels and the elimination of the originally planned subsidies of one billion euros for electricity grid tariffs.
mem/mjm