This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at www.capital.de. Like stern, Capital belongs to RTL Deutschland.
One more day to produce goods, one more day to shop, one more day to advertise. In leap years like 2024, there is an extra day on which economic output can be generated. This can have a positive impact on the gross domestic product (GDP) and make a difference, especially in economically difficult times like these. However, what matters most is whether the bottom line is that there are more working days than in the previous year.
The so-called cyclical working day effect does not measure the effect of more or fewer working days on GDP in relation to an average year – which has 249.7 working days; but on the change compared to the previous year.
“As a rule of thumb, you can say: If the number of working days increases by one percent compared to the previous year” – that would correspond to around 2.5 working days – “GDP growth will be almost a quarter of a percentage point higher due to this calendar effect,” explains Timo Wollmershäuser told the business magazine “Capital”. He heads economic research and forecasts at the Munich Ifo Institute.
According to Commerzbank’s chief economist, Jörg Krämer, in a leap year GDP could actually increase by 0.4 percentage points instead of 0.25 percentage points. “But in sectors such as energy production or restaurants, people work on all calendar days, so the additional working day is less significant in percentage terms,” says Krämer.
“In addition, in some sectors, such as public services or the housing industry, value added is recorded using wages or rents, which are always the same every month.” That’s why Krämer also expects an overall GDP increase of 0.25 percentage points. That corresponds to 10 billion euros that Germany earns additionally.
Because February 29th falls on a Thursday this year, there is actually an additional working day available. Taken alone, according to Wollmershäuser’s calculations, this would make GDP growth 0.1 percentage points higher in 2024. Christoph Schröder from the German Economic Institute (IW) in Cologne also comes to this value. “So that would be a good four billion euros as a leap day effect,” he tells Capital.
However, date-related holidays such as May 1st and October 3rd fall on weekdays this year. According to the Federal Statistical Office, there will therefore only be 248.8 working days in 2024 – 0.9 days fewer than in an average year and also fewer than 2023. And the previous year is crucial for measuring the working day effect.
“Since 0.3 days fewer were worked last year than in an average year, the difference in 2024 compared to 2023 is minus 0.6 working days,” calculates Wollmershäuser from the Ifo Institute. “Converted to the rate of change in gross domestic product, this means a minus of 0.03 percentage points. The calendar effect in 2024 is therefore negligible.”
Last year the effect was a minus of 0.2 percentage points on the rate of change in GDP. Inflation and rising interest rates had dampened the mood in the economy.
The latest figures now show: GDP shrank by a total of 0.3 percent in 2023 compared to the previous year. This meant that Germany slipped slightly into recession. The prospects for the coming year are also rather poor. There will be even fewer working days in 2025 than in this one. According to the Federal Statistical Office, the calendar effect on the rate of change in GDP will then be minus 0.12 percentage points.
The major Olympic events and the European Football Championship usually take place in leap years, which can potentially lead to more consumption. This could have a positive impact on economic growth, but probably only marginally.