At the start of the new year, we are all looking ahead to the challenges that lie ahead. In order to develop suitable business models and strategies, adjust staffing levels and decide on investments, it is important to realistically assess the economic conditions.
The global economy appears to be growing at a stable rate of 2.5 % overall, although the regions are developing quite differently: While leading economic research institutes expect accelerated growth in South America and India, the Chinese economy, which has been growing strongly to date, is only expected to grow at less than 5% in 2024. In the USA and Europe, experts are forecasting growth of 1.5% in each case, with zero growth predicted for Germany.
Driven by scarce raw materials and tight labor markets, high inflation is expected to persist globally, while inflation growth in Germany will continue to decline. However, the decline in inflation will be curbed by high collectively agreed wage settlements, which will impose higher costs on companies. These in turn will have to be passed on in the form of price increases.
Interest rates will gradually fall again in 2024. Led by the US Federal Reserve, the ECB is expected to follow suit with interest rate cuts by summer 2024 at the latest. If this happens, companies’ willingness to invest and construction activity will be boosted again at the end of 2024.
The Fuchs Letters expect global climate protection to become less important because the industrialized countries will strive to secure prosperity and the emerging countries will see their priority in economic growth. As a result, in addition to the expansion of renewable energy sources and hydrogen technologies, fossil energy sources will also become more involved again and nuclear energy will regain importance.
In addition to observable trends towards de-globalization, structural disadvantages of the German industrial location, in particular high personnel and energy costs, will continue to drive production relocations to countries with lower factor costs abroad. In Germany, the number of company insolvencies is very likely to increase. In addition to high personnel costs, the worsening shortage of skilled workers in Western European countries will increasingly become a factor limiting growth. The ability to automate processes and develop company-specific AI models will have a greater impact on the competitiveness of companies in 2024.
These expectations for the development of the economy represent both challenges and opportunities for companies. Let’s tackle them! Perhaps consultingcheck can help with useful information and tools. Or you call me.