Germany's Economy Faces Prolonged Stagnation and Structural Challenges
Economic forecasts predict minimal growth through 2025, with rising unemployment and export declines exacerbating the outlook.
- The German economy is expected to shrink by 0.2% in 2024, with only 0.2% growth forecasted for 2025, marking two years of stagnation.
- Exports have fallen sharply, including a 14% drop in shipments to the U.S., Germany's largest export market, raising concerns over global trade tensions under the incoming Trump administration.
- Unemployment is projected to rise to 6.3% in 2025, with many firms planning significant layoffs, particularly in the automotive and manufacturing sectors.
- Structural issues, including high energy costs, excessive bureaucracy, and declining industrial competitiveness, are seen as major obstacles to recovery.
- Economic recovery is not anticipated until 2026, with modest growth expected as structural reforms and global trade adjustments remain uncertain.
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