Review of the Economy 2025: Stagnation instead of upswing!

Review of the Economy 2025: Stagnation instead of upswing!

Wien, Österreich - economists express themselves pessimistically about the economic situation in Europe. Despite mild positive tendencies, there is still a great need for action, especially with regard to competitiveness and necessary reforms. Jörg Krämer, chief economist of Commerzbank AG, describes the situation as "upwards without momentum". This assessment is underpinned by the current "economic outlook" of the banking association, which was presented in Vienna. Europe has left the recession area, but in 2025 a stagnating growth of 0.0% is predicted, while a slight increase of 1.5% is expected for 2026. This can be seen from the analyzes of Leadersnet

The challenges are reinforced by geopolitical uncertainties, in particular political developments in the United States under Donald Trump. Gerald Resch, General Secretary of the Banking Association, speaks of a fragile optimism and slow economic relaxation. The lack of concrete measures to improve location quality in Germany is critically emphasized. Topics such as reducing bureaucracy and the reform of corporate taxes must be addressed urgently.

economic hurdles for Germany

Germany faces various economic challenges that burden growth. Factors such as high energy costs and a weakening automotive sector contribute to stagnation. Studies by the Kiel Institute predict a real GDP growth of only 0.0%, while Goldman Sachs and the Bundesbank have lower expectations. The uncertainties are increased by the upcoming federal elections in February 2025, which delays investment decisions. High energy prices are pressing on the industry and the dependence on more expensive energy sources has increased, as in a report by

The automotive sector is under pressure because market shares are lost to competitors from the USA and China. At the same time, weak exports and stagnating private consumption burden economic development. In order to enable relaxation, structural reforms are urgently required, in particular to reduce corporate taxes and to improve infrastructure.

In the context of these economic challenges, the European Commission presented a strategy for economic security. The aim of this strategy is to minimize risks of crucial economic flows within the framework of geopolitical tensions and technological change. EU Commission President Ursula von der Leyen emphasizes the priority of economic security, while Josepf emphasizes new dimensions of the security concept. The strategy, as from EC Europa , provides for a community framework to ensure economic security.

A central aspect of this initiative is to promote the EU's competitiveness and the protection of economic security through measures to reduce risk. These include strengthening the resilience of supply chains and the physical and cyber security of critical infrastructures. With this strategy, the EU also pursues the goal of supporting the technological sovereignty and resilience of the value chains in order to create a robust economic framework for the future.

Overall, the economic situation in Europe remains tense. Without comprehensive reforms and a clear strategy for stabilizing and improving competitiveness, there is a risk of structural stagnation that could burden the prospects beyond 2025.