Latest news with #EnzoWeber
Zawya
11-04-2025
- Business
- Zawya
Trade war could cut German GDP more than 1%, economic institute says
A trade conflict based on blanket 25% tariffs could cut economic growth in Germany by more than 1 percentage point, according to calculations from an economic institute. That duty would reduce gross domestic product by 1.2% one year after coming into effect, according to the study by the IAB Institute for Employment Research on Friday. The number of employed people would be 90,000 lower and the number of people in the labour force would be 10,000 lower, the study showed, assuming flat tariff increases of 25%. "A structural crisis and now a trade crisis on top of that: this is a blow for industry," said Enzo Weber, head of macroeconomics at IAB. Its figures chime with the country's leading forecasting institute, which said this week the tariffs could put Germany on track for a third year of recession for the first time in post-war history. The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($277.84 billion), while China is its second biggest trading partner. Germany, like most of the world, is now subject to a 10% tariff on its exports to the United States. But a 20% rate is still looming despite a 90-day pause. Based on the German Economic Institute IW's use of a simulation tool known as the Global Economic Model of Oxford Economics, the huge tariffs currently in place between the U.S. and China alone would reduce German GDP by an average of 1.1% annually in the years 2025 to 2028, compared with a scenario without new tariffs. China would emerge as the biggest loser from this escalation with a GDP decline of 2.9%, while the tariffs would mean a drop of 1.1% for the U.S., IW trade expert Galina Kolev-Schaefer said. "We must not rest on our laurels during the tariff pause in the American-European trade dispute," Kolev-Schaefer said. "The conflict between the U.S. and China continues to rage, and this also has tangible consequences for the European Union." (Reporting by Holger Hansen, Rene Wagner and Maria Martinez; Editing by Ludwig Burger and Alison Williams)
Yahoo
19-02-2025
- Business
- Yahoo
Labour shortage will hit Germany's east hardest as population ages
Of Germany's 16 federal states, only Hamburg and Berlin will see an increase in the working age population by 2040, a study suggests, with the eastern part of the country set to experience the greatest decline. According to a report published by the Nuremberg Institute for Employment Research (IAB) on Wednesday, the effects of demographic change on the German labour market will be felt most in the eastern German states and the south-western Saarland. The working age population in the eastern German state of Thuringia is expected to fall the most, by 15.8%, by 2040. The IAB predicts that the number of economically active people in Germany will fall from 47.1 million in 2023 to 46 million by 2040, with a total of 910,000 fewer jobs. IAB expert Enzo Weber explains that this development will vary from region to region. While most jobs will be created in Berlin, Hamburg and Hesse by 2040, few or no jobs will emerge in the eastern German territorial states (excluding Berlin), he said. Proportionally, most jobs will be lost due to structural change and a shrinking workforce, he added. However, due to the ageing population, around 600,000 new positions are expected to arise in health care and social services nationwide by 2024. Conversely, fewer workers will be needed in industry, the civil service, wholesale and retail and the construction industry. Weber stated that if Germany wants to maintain its economic strength, efforts must be made in the declining regions. Otherwise, he warned there is a risk of triggering a downward spiral. When fewer people live in an area, public infrastructure is cut back, which can lead to even more people moving away, he said. Weber sees potential in older people and women who could work longer or more hours. Technological solutions like working from home could also help, allowing people in regions with few job opportunities to work in areas that need workers without having to move. However, Weber emphasized that immigration of foreign workers is essential: "They often work below their potential in Germany." He therefore stressed the need to improve the recognition of qualifications, to offer more language support and further professional training.
Yahoo
17-02-2025
- Business
- Yahoo
Study: Higher defence spending could create 200,000 jobs in Germany
Additional spending on defence could create up to 200,000 jobs in Germany, a study found on Monday. The report, led by the Institute for Employment Research (IAB), found that raising expenditure on the German military, or Bundeswehr, from 2% to 3% of gross domestic product (GDP) would give the struggling German economy a significant boost. IAB researcher Enzo Weber said the measure could lift economic growth by 1% and create thousands of new jobs in the Bundeswehr, in construction and in metal production. Germany's defence industry could receive much-needed impetus through reliable planning for investments and the recruitment of skilled workers. "If government procurement is expanded, this must be used as an opportunity to promote technology and innovation," said Weber. "The aim is to give the industry's ailing economic strength the greatest possible boost." While higher expenditure on defence would be a considerable burden for the German economy, it would ultimately be bearable if the spending is financed through additional borrowing, Weber argued. According to the report, financing extra spending on the German military by raising taxes, or through cuts to health and education budgets, would limit the positive effect on employment. Raising defence spending is a key political issue in Germany ahead of national elections on Sunday. The country hit the NATO guideline of spending 2% of GDP on the military last year, but further expenditure could be a challenge for the next government amid demands from US President Donald Trump for European countries to lift spending to 5% of GDP.
