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German economy set to shrink again amid industrial slowdown and energy crisis

German economy set to shrink again amid industrial slowdown and energy crisis

Posted on October 8, 2024   |  

Germany’s Economy Ministry now predicts a 0.2% contraction in 2024, revising its earlier forecast of 0.3% growth.

The ministry expects the economy to grow by 1.1% in 2025 and by 1.6% in 2026.

In 2023, Germany suffered the only contraction among major advanced economies due to an industrial slowdown, fewer export orders, and rising energy costs caused by Russia’s war in Ukraine.

Lower inflation and interest rate cuts from the European Central Bank failed to boost the economy due to weak demand at home and abroad.

China’s growing competition further pressures Germany’s economy.

The shortage of skilled workers worsens the country’s economic struggles.

Germany faces challenges with the transition from fossil fuels to renewable energy.