The German economy faced a number of challenges at the end of 2024. Modest growth in consumer spending was unable to offset a sharp decline in exports, which became the main reason for the contraction in the economy. Reports UNIAN. This has been reported by Kontrakty.UA.
The publication Bloomberg states that production volume fell by 0.2% in the fourth quarter compared to the previous three months. Net trade dropped by 1.2%, while consumer spending increased by only 0.1%.
The largest economy in Europe has become a weak link on the continent, as its vast manufacturing sector struggles to adapt to new realities – Russia's war in Ukraine undermines a business model built on cheap energy, while demand from China is weakening.
Moreover, Donald Trump's return to the White House threatens global trade, and years of underinvestment domestically are becoming apparent.
Some relief is expected soon. Friedrich Merz's conservatives won the elections, advocating for economic stimulus. He intends to form a government by Easter, and businesses and investors are hopeful for changes.
Germany's Economic Problems - Latest News
In the first half of 2024, around 11,000 German companies declared bankruptcy, marking the highest rate in nearly a decade.
On October 14, Bloomberg reported that Berlin is experiencing a mild recession, indicating serious difficulties in the largest economy.
In December 2024, it became known that after five years of stagnation, the German economy shrank by 5%, compared to pre-pandemic growth rates. Much of the deficit will be difficult to recover due to structural blows, particularly in the energy sector and the automotive industry.