Overview

• 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.