Consumer spending boosts economic growth
Wednesday 10, November 2010
ifo Institute for Economic Research - travel industry among sectors benefiting from economic recovery.
It is expected that in the years to come Germany’s travel industry will benefit to an above-average degree from global economic growth and its positive impact on economic developments in Germany. Speaking at the 18th World Travel Monitor Forum in Pisa, Dr. Gernot Nerb, Director of the Munich ifo Institute for Economic Research, said: “Whereas in 2010 exports were the driving force behind the resurgent economy, in the years to come German consumers in particular will play an important part in sustaining the economic recovery. Private spending by the general public will carry the economy after the recession.“
At the same time Gernot Nerb emphatically rejected any calls for tax cuts, a view held by some because of current forecasts predicting higher tax revenues. “Regardless of the fact that there is still no room for tax cuts, they are currently not needed in order to stimulate private spending.“
In Nerb’s opinion, a genuine drop in German unemployment, and in particular lessening anxiety over possibly losing one’s job will have an especially positive effect on consumer spending. “We can assume that people in Germany will have more money in their pockets next year, which we also expect them to spend on holiday travel. The situation in the employment market is expected to remain good, which combined with favourable wage settlements will also help.“
According to Gernot Nerb, the travel industry will also benefit from the effects of the state-run car scrappage scheme in 2009. “Last year many people made use of the opportunity to make an early decision to invest in a new car. For many consumers this means that over the next few years there will be room for spending in other areas, and that includes holiday travel.”
In Nerb’s view threshold countries in particular are driving the economic recovery. “The buoyant employment market and revived private spending are clearly the result of economic growth in threshold countries, in particular in countries such as China, India and Brazil.“
Launched by the consultancy IPK International and sponsored by ITB Berlin, every year at the World Travel Monitor Forum in Pisa 50 tourism experts and scientists from around the world present currents statistics and the latest trends in international tourism.
“The economic and financial crisis that lies behind us has provided impressive proof that holiday trips are a constant in German life“, said Dr. Martin Buck, Director, Competence Center Travel and Logistics, Messe Berlin. “The economic recovery and the expected boost for the travel industry are encouraging signs for all sectors of the global economy.“
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