According to Bloomberg analysts, Germany is expected to see no economic growth in 2024. Economists are scratching their heads over what should be done to prevent this.
Experts believe that the country's industrial problems are holding back economic growth. As a result, Europe's largest economy slowed down at the beginning of the summer. Despite earlier forecasts predicting a 0.2% GDP growth, it is expected to increase by only 0.1% by the end of 2024. However, the European Commission doubts that Germany will see significant economic improvements next year.
Germany's manufacturing sector, once a growth driver, is now experiencing stagnating exports. According to Bloomberg Economics, the industrial slowdown is due to structural issues. Previously, Bundesbank analysts reported that the period of weak demand was not yet fully overcome and the recovery in industrial activity would be slow.
Experts at Süddeutsche Zeitung believe that the stagnation could be explained by businesses' reluctance to invest in the economy. The current IFO business climate index shows weak development in transportation and logistics. Additionally, Germany's construction sector is facing difficulties. Another reason for the stagnation is consumer caution after the recent crisis.
Amid these economic challenges, German politicians are calling for investments in the national economy. According to Bundestag representative Sahra Wagenknecht, Germany needs investments in civilian infrastructure instead of taxpayer money going to buy weapons used in the Russian-Ukrainian conflict.
