Germany’s economy is facing a severe crisis. The country’s GDP is expected to shrink by 0.1% this year, according to the BDI Industry Association. For the first time since German reunification, the country is witnessing three consecutive years of GDP contraction.
The BDI has projected that the Eurozone’s growth will be around 1.1%, while global growth is expected to be 3.2%. Among European nations, Germany is one of the worst-performing economies.
BDI President Peter Leibinger stated in Berlin that the situation is extremely serious, particularly as industrial growth is facing structural breakdowns.
Increasing foreign competition, high energy costs, persistently high interest rates, and economic uncertainty have had a severe impact on Germany’s economy. In 2024, the country’s economy contracted for the second consecutive year.
Leibinger further emphasized that Germany’s economic crisis is more than just a consequence of the COVID-19 pandemic or Russia’s invasion of Ukraine.
He pointed out that the issues stem from structural weaknesses that have persisted since 2018, which successive governments have failed to address.
“Our economy urgently needs government investment for transformation and resilience,” he added.