One of the largest economies in the world and the biggest economy in Europe once again proved to be resilient. Despite difficulties in the region and in the whole world, Germany may see economic growth, though very fragile. Economists predict a multi-year period of weak growth in Germany, whereas other countries may face a long-lasting drop.
Even under the current conditions, Germany remains an island of financial stability. A grave crisis in the region has ruined the prospect of healthy economic development. Experts at the ifo Institute (Leibniz Institute for Economic Research at the University of Munich) suppose that “the German economy would face a slower or weaker growth path.” In the medium term, the economic expansion will be less than 1% per annum. This is slower than in the last 30 years. DIW President Marcel Fratzscher explains such weak economic growth by a decline in employment and a shortage of skilled workers. “The weakening of Germany’s economic potential is due to its own failures and has little to do with the war in Ukraine or the corona pandemic,” he added. Marcel Fratzscher supposes that the main problem is the “failed ecological transformation so far, which has led to Germany being far too dependent on fossil and very expensive energy imports.” The research unveiled that in the last 30 years, the average economic growth in Germany stood at 1.4%. However, until 2027, the economy is likely to expand by just 0.7% a year.
