30 November 2023 – Inflation in Germany continues to fall. In November, it even fell to its lowest level since June 2021. And the latest OECD economic outlook shows once again that the global economy is stronger and more robust than many had assumed.
- Record decline: Germany's inflation continues to fall
- OECD economic outlook: Positive trend despite challenges
Record decline: Germany’s inflation continues to fall
Germany is experiencing a positive surprise: inflation has fallen more sharply than expected – from 3.8% in October to 3.2% in November. A low not seen since June 2021. A real ray of hope for the economy!
Real wage growth returns: citizens benefit
Thanks to falling inflation, real wage growth in Germany is returning to positive territory. After a tough year with high inflation, this is a real reason to celebrate: real wages in Germany rose by 0.6 per cent in the third quarter and are set to continue growing.
Eurozone follows the trend
Things are also looking good in the eurozone: Inflation fell to 2.9% in October and is expected to fall further to 2.7% according to Eurostat. This promises rising real wages and increasing purchasing power next year.
Positive outlook for consumption and the stock markets
Rising real wages could boost private consumption. This gives shares of cyclical consumer goods manufacturers in Europe and Germany a strong tailwind. The sector, currently attractively valued, is going through a correction phase that could offer investors opportunities for worthwhile investments. For some, this is certainly an ideal time to enter this promising sector.
OECD economic outlook: Positive trend despite challenges
Despite the challenges posed by inflation and sluggish growth prospects, the global economy is performing surprisingly strongly in 2023. Although there was a slight slowdown due to tighter financial conditions and weaker growth in trade, the economy proved to be more resilient than many had expected.
Optimistic forecasts for the coming years
The OECD expects global GDP growth of 2.7% in 2024 and even 3.0% in 2025. This points to a steady recovery and a strengthening of real incomes as soon as inflation continues to fall.
Inflation on the retreat
The forecasts show that inflation in most major economies is likely to fall back to the central banks’ target level by the end of 2025. Annual OECD inflation is expected to fall from 7.0% in 2023 to 5.2% in 2024 and finally to 3.8% in 2025.
Trade growth remains an important factor
Although global trade growth has not been as high as hoped this year, trade in services has increased by 6.4% thanks to the normalisation of travel in Asia and an upturn in tourism. The importance of trade for productivity and development also remains central.
Positive outlook despite further challenges
Overall, the OECD economic outlook paints a picture of resilience and continued growth in the global economy. With decreasing inflation and increasing trade, there is reason to hope for continued positive development.
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