Atradius: German economy will not benefit from possible soft landing of the global economy

Cologne (ots)

• Global economic growth for 2024 at 2.6 percent
• Inflation slows and approaches central bank targets
• Forecast: Germany continues to fall behind as an export country

After challenging years, the global economy is now showing signs of a soft landing due to falling inflation. The outlook for the German economy remains tense, however. “Despite a possible recovery in the global economy, Germany remains a weak point for the European economy,” says Frank Liebold, Country Director Germany at Atradius. In its half-yearly economic outlook, the international credit insurer estimates that global growth will be 2.6 percent this year, an increase of 0.5 percent compared to expectations six months ago. Growth of 0.8 percent is expected in the eurozone, while zero growth is expected for Germany.

Inflation has fallen over the past two years and is now approaching the central banks’ targets. Inflation is on a clear downward path, especially in the eurozone, and is expected to fall below the two percent mark in 2024. For Germany, however, the signs are not pointing to relief. Companies in this country are still burdened by high energy prices, the shortage of skilled workers, the poor order situation and excessive bureaucracy. The latest export figures are also evidence of the difficult situation facing German industry: exports by German companies fell in May by the sharpest amount since December 2023. Imports also shrank. The fact that the situation in Germany remains difficult is also shown by the increasing number of bankruptcies and the deteriorating payment morale.

A revival of the economy through impulses from abroad is also not to be expected. “The US economy is more stable than expected, but inflation is more stubborn than in the Eurozone,” says Frank Liebold. A reduction in key interest rates and a change in the protectionist course of the USA are not to be expected.

After world trade shrank by 1.2 percent in 2023, Atradius forecasts trade growth to 2.5 percent in 2024 and three percent in 2025. “Although growth rates are robust, they remain relatively subdued compared to the last two decades. In addition, Germany is falling further and further behind as an export country,” says Frank Liebold. This is not least due to falling demand from export countries such as China. Trade tensions between China and the USA are likely to continue. There is also no general change in geopolitical risks. No short-term solution is to be expected in the war between Ukraine and Russia, tensions in the Middle East are not abating, and the conflict between China and Taiwan continues to simmer. “All of these factors have an impact on world trade and thus also directly and indirectly on the liquidity of companies in the individual countries. This represents an essential risk for exports,” warns Frank Liebold.

Emerging countries are growing faster than industrialized countries

Industrialized countries are expected to grow by 1.6 percent by 2024, and at a similar rate in 2025. According to Atradius, emerging economies (EMEs) have better prospects, but they will continue to grow slowly, with economic growth expected to be only 3.9 percent this year and 4.0 percent in 2025. The German economy can therefore hardly expect any support from the emerging markets. “In China in particular, momentum is likely to slow, which is alarming given the importance of the Chinese market for German industry,” explains Frank Liebold. If geopolitical tensions continue to increase, this could lead to higher transport costs and higher oil prices, which could drive inflation up again.

About Atradius

Atradius is a global provider of credit insurance, surety, debt collection and business intelligence services with a strategic presence in more than 50 countries. The products offered by Atradius protect companies worldwide against the risk of default when selling goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. For more information, visit www.atradius.com.