Germany Faces Investment Shortfall, Lagging Behind Global Peers

A new KfW study highlights Germany's declining private and public investments compared to the U.S. and EU, raising concerns about economic growth and climate goals.

Germany's investments in machinery, housing, and research remain significantly below pre-pandemic levels, while the U.S. and EU have seen growth in these areas.
Housing investments in Germany are down 13% since 2019, compared to a 1% increase in both the U.S. and EU despite rising interest rates globally.
Spending on research, development, and software in Germany increased by 11% since 2019 but still lags behind the U.S. (36%) and France (27%).
High energy costs, labor shortages, and bureaucracy are cited as key factors deterring private sector investment in Germany.
Debates over Germany's debt brake intensify, with calls for reform to boost public investment, but officials stress the need for broader economic growth strategies.