Germany's Economy Expected to Shrink Again in Q4, Longest Decline Since 2000

Business sentiment worsens as Ifo Institute's index falls, high interest rates and budget crisis contribute to the downturn.

Germany's economy is expected to shrink again in the fourth quarter of 2023, marking the longest period of economic decline since the start of the millennium.
Business sentiment in Germany has worsened, with the Ifo Institute's business climate index falling to 86.4 in December, from 87.2 in November, defying analysts' predictions of a rise to 87.8.
High interest rates, a budget crisis, and a decline in business morale are contributing to the economic downturn.
Germany's Chancellor, Olaf Scholz, is facing a €17bn (£15bn) deficit in the public finances next year after the constitutional court ruled the government's budget was illegal for breaking laws against taking on new debt.
The German economy is also grappling with high energy prices, global economic weakness, an aging population, lagging use of digital technology in business and government, excessive bureaucracy, and a shortage of skilled labor.