GENERAL PROGRAM XI INTERNATIONAL TOURISM FORUM
The south of Gran Canaria hosts a new edition of the Maspalomas Tourism Forum with the presence of experts and professionals from the European industry. This 2023, the shadows over the German economy center part of the debate. Germany is preparing for another quarter of economic contraction, as Bundesbank reported this November. The country, which has been grappling with high energy costs and supply chain disruptions, is currently among Europe's weakest economies. Despite these challenges, there are early signs of a possible recovery over the next year.
The IMF predicted this month that Germany would be the worst-performing major economy this year, with GDP contracting 0,5 percent. It cited slower demand from its trading partners and weakness in sectors that are sensitive to high interest rates. By contrast, the U.S. economy is forecast to grow 2,1 percent and France's 1,0 percent. Experts are clear why Germany faces such a uniquely bleak outlook. It took a much bigger hit from last year's surge in energy prices than many other large economies, in part because it has so many large, gasoline-guzzling manufacturing companies. The ECB's tightening of monetary policy to tackle inflation has also taken its toll, as has the slow recovery in trade with China, Berlin's largest trading partner.
The latest forecast from the Bundesbank suggests that Germany's economy will continue to face difficulties in the last quarter of 2023. This period marks an extension of the industrial recession that has been exacerbated by the ongoing war against Ukraine, rising energy and rising interest rates. Of all the quarters this year, only one has seen growth, highlighting the severity of the economic headwinds.
However, there is a ray of hope on the horizon for 2024. The Bundesbank sees strong employment figures and wage increases that could underpin an eventual recovery. Also among the positive factors cited are tentative signs of recovery in external demand and an expected boost in real consumption due to increased net income. However, even with these potential drivers, there are still no definitive signs of a rebound in global industrial activity, as new orders continue to decline and overall demand remains weak. The economic report also mentioned that the exchange rate has remained stable after the publication, with EUR/USD trading at 1,0930.
