“The recovery is continuing, even if its not with quite as much gusto as this year,” commented Ifo president Hans-Werner Sinn in the Bild newspaper. “That makes Germany the economic locomotive of Europe.”
Sinn also predicted that the job market will stay “very pleasing” in 2011. “The number of unemployed will drop by another 300,000 to an average of around 2.9 million,” he said, before adding that he even expected wages to rise after years of stagnation.
Inflation is expected stay at a steady 1.7 percent. “That’s 0.2 percentage points more than the eurozone average, because the economy is stronger in Germany,” said Sinn.
But Sinn said there would only be a modest, one-percent increase in pensions. “Judging this figure, you have to take into account that pensions were not cut at all this year, even though wages did fall last year because of the introduction of part-time work and the recession,” he explained.