Suggestions for more growth: Experts present ideas for economic recovery

Capped electricity prices, investment offensives and more: According to a study by the Institute for Macroeconomics and Economic Research (IMK) of the trade union-affiliated Hans Böckler Foundation, the German economy could be brought back up to speed with targeted political measures.

The economists are calling on the next federal government to set three priorities in its economic policy. First: The state should invest heavily in railways, roads, electricity networks and schools in order to modernize the infrastructure and strengthen domestic demand.

“We are in a new world in terms of economic policy”

Secondly: To combat the high and highly fluctuating electricity prices, a temporary, state-subsidized bridge electricity price for businesses and private households would make sense. In the long term, according to IMK, network expansion could be financed through government loans.

Third: An industrial policy coordinated by the EU should also support important sectors such as mobility, energy, semiconductors and health in the climate-friendly transformation.

“We are in a new world in terms of economic policy. That is precisely why we need new solutions that meet the challenges,” said Sebastian Dullien, the scientific director of the IMK. The biggest challenge for the next federal government is to prevent “strategically important industrial sectors from collapsing.” Dullien cited the automotive industry and energy-intensive sectors such as chemicals and steel as examples.

Forecast: Economy will only grow minimally in 2025

According to the analysis, the fact that the German economy has barely grown in recent years cannot be attributed to high wage costs or social spending. This is primarily the result of changed general conditions and the power struggle between the important trading partners China and the USA.

According to Dullien, both countries have significantly increased their industrial and trade policy activities – for example through subsidies to national companies and tariffs. The export-oriented German economy is suffering as a result. In addition, the energy price shock caused by the Russian attack on Ukraine is still having an impact.

The study says that the continued high interest rates are also slowing down the economy. The experts criticize the fact that the European Central Bank has recently only reduced the key interest rate slightly.

The IMK is not very confident about developments in Germany. In 2025, only mini-growth of 0.1 percent is expected.