It is expected to fall from 6.0% on average in 2023 to 2.7% in 2025. Wage growth will be strong, and the labour market will be robust. Households' purchasing power and consumption will thus gradually recover. (Real) government consumption will decline sharply in 2023 owing to expenditure in connection with the pandemic coming to an end, before increasing significantly again.
However, tighter monetary policy has resulted in higher financing costs. This will dampen private investment, especially in housing construction. The stronger euro and the high wage dynamics will constitute headwinds for German exporters. Nevertheless, exports will grow moderately amid rising foreign demand.