German economy on the brink: growth stagnation remains!

German economy on the brink: growth stagnation remains!

Munich/Wiesbaden/Kiel, October 31, 2024. The German economy narrowly avoided a recession! Ifo expert Klaus Wohlrabe comments on the latest figures from the “Federal Statistical Office”: In the third quarter of 2024 there was a surprising increase in economic output of 0.2 percent. But caution is advised! The growth figures for the second quarter were revised downwards - from minus 0.1 to minus 0.3 percent. The industry remains a problem child, and Wohlrabe warns: “A turnaround is not yet in sight.” There could be a slight recovery in the fourth quarter, but the problems are deep-rooted.

Stagnation despite bright spots

The Kiel Institute for the World Economy (IfW Kiel) sees the situation even more skeptically. Dr. Nils Jannsen, the economic chief, explains: “The German economy is not getting anywhere.” In historical and international comparison, economic performance is weak. The gross domestic product (GDP) is barely above the 2019 level and has been stagnating since the beginning of 2022. While other countries in the euro area have increased their GDP by more than 5 percent, Germany is lagging behind. The growth rate in recent quarters has been weaker than in large economies such as France or Spain.

The structural problems of the German economy are alarming! Jannsen warns of declining competitiveness. Industrial production is trending downward and goods exports are lagging behind global trade dynamics. An economic recovery will not change the fact that Germany is lagging far behind its old growth path. The signs point to a storm and the economy is on the brink!