Germany's economy shrinks for second consecutive year amid rising energy costs
Date
1/19/2025 12:45:13 AM
(MENAFN) For the first time in over 20 years, Germany's Economy has shrunk for two consecutive years, according to a report released Wednesday by the federal statistics office, Destatis.
Data revealed a 0.2 percent decline in gross domestic product (GDP) in 2024, following a 0.3 percent contraction in 2023.
As the Eurozone’s largest economy, Germany has faced increasing challenges in recent years, driven primarily by a prolonged downturn in manufacturing. The transition from affordable Russian gas to costlier liquefied natural gas (LNG) from the United States has significantly raised energy costs, hitting manufacturers and small businesses hard.
Destatis President Ruth Brand attributed the downturn to both “cyclical and structural pressures,” including growing competition in key export markets, elevated energy costs, high interest rates, and an uncertain economic environment.
Exports, a cornerstone of Germany’s economy, fell by 0.8 percent in 2024, while industrial output stagnated, highlighting the difficulty of competing globally as production expenses continue to rise.
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