Germany's Economy Contracts for Second Consecutive Year

Europe's largest economy faces mounting challenges, including political instability and structural economic issues, ahead of February's snap elections.

Germany's GDP shrank by 0.2% in 2024, following a 0.3% contraction in 2023, marking the first back-to-back annual decline since the early 2000s.
The economic downturn is driven by high energy costs, declining manufacturing output, and increasing competition from China in key industries like automotive and machinery.
The collapse of Chancellor Olaf Scholz's coalition government in late 2024 has led to snap elections scheduled for February 23, with voters prioritizing economic and immigration issues.
Major German companies, including Volkswagen, announced significant layoffs, highlighting challenges in maintaining global competitiveness and addressing structural labor issues.
Economists warn that Germany's economic model, reliant on exports and cheap energy, requires urgent reform as the country faces its longest phase of stagnation in post-war history.