Economic low: business shrinks in the final quarter of 2024 – export weak

Economic low: business shrinks in the final quarter of 2024 – export weak

Stirrup
Economy shrinks in the final quarter of 2024 – export weak






The German economy does not come out of the crisis. In the final quarter of 2024 it has shrunk even more than expected. That was not due to private consumption.

The German economy also has no way out of its crisis at the turn of the year. In the fourth quarter of 2024, the gross domestic product shrank by 0.2 percent to the previous quarter and thus somewhat more than initially assumed, as the Federal Statistical Office in Wiesbaden announced according to an initial estimate. The authority had recently assumed a minus of 0.1 percent to the previous quarter.

While the consumer expenditure of private consumers rose and the state spent more, exports were significantly lower than in the previous quarter, the statisticians wrote.

The gross domestic product also dropped by 0.2 percent for the previous year in 2024. The German economy has shrunk for the second year in a row. It has been the longest recession for more than 20 years: Most recently, German economic output 2002/2003 had decreased two years in a row.

German economy also under pressure in 2025

An upswing is not in sight. For example, the Federal Government has evaporated its growth forecast for 2025 to 0.3 percent after it had expected an increase of 1.1 percent in autumn. The Bundesbank and the Council of Experts (“economic”) also predict only a mini growth of 0.2 percent or 0.4 percent. It is only in 2026 that the Federal Government expects a greater economic growth of 1.1 percent.

Hope for a change of politics, worries about Trump

Filling key interest rates from the European Central Bank (ECB) could give the economy a little boost, because this makes loans cheaper for companies and private individuals – for example for house builders.

But the uncertainty remains great. Business associations hope for a change of policy after the election on February 23. The Kiel Institute for the global economy estimates that the economic impulses of a new federal government would probably come into play at the earliest in 2026. In addition, under the new US President Donald Trump, trade conflicts are threatened with the EU, which could particularly affect Germany’s exporting nation.

Longest stagnation phase of post -war history

The German economy has hardly been growing for years and lags behind in international comparison. According to the IFO Institute, the price-adjusted gross domestic product in 2024 was only a little higher than in 2019 before Corona pandemic. Germany thus runs through “the longest stagnation phase of post -war history”.

The crisis is increasingly arriving on the job market. Almost all branches of industry wanted to make do with fewer employees, the IFO Institute wrote. Especially in industry and trade in business, to reduce jobs.

Last year, important industrial sectors such as car and mechanical engineering produced less, which shrank exports, the investments in machines, devices and vehicles fell vigorously, and the construction industry suffered from the crisis in housing construction. Consumers’ consumption expenditure only grew slightly. Many people keep their money together in the face of increased prices and take care of their job. At the same time, Germany is suffering from high energy prices and great bureaucracy.

dpa

Source: Stern

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