Germany before turning? New tax cuts could save economy!

The Banque Syz has outlined ten potential surprises for 2025 in its current report, which could significantly influence the markets. Possible political and economic changes in Germany are particularly focused, where a CDU-led coalition could strive for a loosening of the debt brake after the new elections at the end of February. This would not only enable higher new debt, but also create urgently needed tax incentives to revitalize the stagnating German economy. Such a scenario was detailed in an article by finanzen.net explained.

In addition, Germany is planning talks about the issue of Eurobonds to finance structural investments that would promote growth in Europe. These measures could increase public debt in Germany, but also boost inflation, which could ultimately lead the ECB to adapt its monetary policy measures. While the economist Clemens Fuest warns of the IFO Institute that the weakness of the German economy has become chronic, the Banque Syz also draws a picture of a robust global economy that could be burdened again by a deep correction of the S&P 500 if a so-called "slugflation" is set up in the USA.

effects on the global market

The "Slugflation", a slow economic growth in combination with persistent inflation, is forecast as another surprising scenario. As the Banque Syz reports, the US Federal Reserve could not be forced to reduce its interest rates as planned despite increasing inflation, which would have serious consequences for the companies and thus also for the global market. At the same time, the bank proclaims a positive market development, which could be marked by uncertainties and challenges, as in another article by Finance.ch indicated.