“Germany is stuck in stagnation,” Economy Minister Robert Habeck told a press conference in Berlin.
The report said the revision of the growth forecast was “mainly due” to the collapse of the government last November, which led to a disruption in measures intended to encourage growth.
While Europe’s biggest economy awaits anew government following the February 23 elections, the country’s future economic policy remains uncertain.
Lower energy costs, lower taxes, more financial incentives for investment, more flexible labor laws, an end to social security payments and above all, less bureaucracy — that is what German businesses are demanding from the country’s next government.
“The economy is shrinking. Unemployment is growing. Germany has become unattractive for investors,” that is how Rainer Dulger, president of the Confederation of German Employers’ Associations (BDA), summed up the situation at the last employers’ conference in late October 2024.
How will Germany forward?
Germany’s economic strength depends heavily on industry, which is responsible for roughly a quarter of GDP. After two years of recession, the Federation of German Industry (BDI) calculated that production output is now far lower than it was five years ago. The result: Less is produced and built in Germany, and less is bought and consumed.
How does Germany turns that around?