Overview

• Germany's GDP fell by 0.2% in the fourth quarter of 2024, marking the second consecutive year of economic contraction.
• Weak exports, down 2.2% from the previous quarter, and a struggling manufacturing sector were key drivers of the downturn.
• The country faces its longest recession in over 20 years, with experts predicting minimal growth or further contraction in 2025.
• Rising deficits, despite record government revenues, highlight fiscal challenges, with increased spending on social services and higher borrowing costs.
• Calls for reform include reducing bureaucracy, revisiting the debt brake policy, and boosting infrastructure investment to stabilize the economy.