Market | Economic growth in 2024 | Key factors |
Core markets |
Germany | -0,2 % | - Despite rising real wages, consumers remained reluctant to spend in 2024.
- The savings rate of German citizens has risen. It stood at 11.1% in the first half of 2024, a very high figure by both historical and international standards (e.g. USA: 4.7% in 2023) (Federal Statistical Office).
- Construction investment (-3.5%) and investment in equipment such as machinery, appliances and vehicles continued to decline (-5.5%) according to the Federal Statistical Office.
- Foreign trade developed sluggishly. Exports of goods and services fell by 0.8% (Federal Statistical Office).
- Domestic economic conditions have continued to deteriorate (e.g. high energy costs, persistently high interest rates, a high level of bureaucracy and regulation, higher corporate taxation compared to other countries, an ageing population/lack of qualified specialists, sluggish progress in digitalisation and an uncertain economic outlook).
- A new employment peak was reached (+0.2% according to the Federal Statistical Office), although the momentum came to a standstill at the end of the year.
- Political instability due to the collapse of the federal government consisting of the SPD, Greens and FDP (Am-pel coalition) on 6 November 2024.
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Netherlands | +0,9 % | - The Dutch economy cooled down.
- Inflation is slowly declining, but remains high at 3.2% in 2024 according to the European Commission and OECD.
- According to EUROCONSTRUCT, labour costs rose by 6.4%.
- Following a decline in the first half of the year, private consumption recorded an increase in the second half of the year, which is attributable to strong real wage growth.
- The unemployment rate remained stable at 3.7% according to the OECD. There are more vacancies than unemployed people.
- Investment growth was recorded due to improved financing conditions and increasing public investment.
- Regulatory pressure has increased.
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Switzerland | +0,9 % | - Inflationary pressure continues to fall significantly. This is leading to the appreciation of the Swiss franc.
- The Swiss National Bank (SNB) eased its monetary policy and lowered the key interest rate for the fourth time in 2024, to 0.5% in December (SNB).
- The order situation is weak and industrial production capacities are underutilised.
- Growth is being hampered by weak investment, while the pharmaceutical industry is providing impetus.
- The export industry is suffering from a lack of foreign demand and the strong Swiss franc is holding back exports.
- Both private consumption and public spending are supporting economic development.
- The labour market developed solidly. According to the State Secretariat for Economic Affairs SECO, the unemployment rate in 2024 is 2.4%.
- Real wages are rising after two years of decline.
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Growth markets |
Great Britain | +0,9 % | - Measured by the consumer price index (CPI), the overall inflation rate fell to 1.7% in September 2024, the lowest level since April 2021 according to EURO-CONSTRUCT, driven by lower petrol prices and air fares.
- For the first time since 2020, the Bank of England cut its base rate in August and November 2024 by 0.25 percentage points to 4.75% at the end of the year (CEIC Data).
- The reduction in the base rate was influenced by the slowdown in inflation in the services sector and the fall in the global oil price.
- The unemployment rate remains at a low level, but increased at the end of 2024 and rose to 4.2% in 2024 according to the OECD.
- Wage growth is slowing, although domestic price pressure from wage increases remains.
- There is still a shortage of skilled labour in certain occupational groups such as engineers and financial specialists.
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USA | +2,8 % | - Private consumption continues to grow solidly (+ 2.7% in 2024 according to the OECD), partly due to real wage growth.
- Investment has grown strongly in some sectors, supported by the new industrial policy measures enacted in recent years.
- Inflation is also easing noticeably thanks to the fall in energy prices.
- The combination of falling inflation and strong growth is due, among other things, to an increase in immigration and a rise in labour productivity.
- The key interest rate was lowered for the first time in four years by the US Federal Reserve in September 2024, by 0.5 percentage points (LBBW).
- The second and third interest rate cuts followed in November and December, each by 0.25 percentage points to 4.5%, as a further reaction to declining inflation (LBBW).
- The US economy is close to full employment, with a low unemployment rate of 4.0% according to the OECD.
- The large current account deficit in the face of a strong dollar partly reflects strong domestic demand.
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France | +1,1 % | - Economic development remains sluggish, particularly due to the significant decline in investment.
- The rise in interest rates in recent years is having a negative impact on corporate investment in particular (-0.6% in 2024 according to EUROCONSTRUCT).
- Overall weak private consumption in 2024 (+0.8% according to the OECD) benefited temporarily in the third quarter from an increase due to the Olympic Games.
- Foreign demand is the main driver of GDP for the second year in a row, with continued public spending also supporting growth.
- On 4 December, after three months in office, the head of government Barnier was ousted by a vote of no confidence in the French National Assembly. The political instability is paralysing Europe and its second-largest economy.
- The unemployment rate rose from 7.3% in 2023 to 7.4% (OECD) and remained at a consistently high level.
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