Germany's economy faces severe crisis
Date
1/30/2025 6:59:00 AM
(MENAFN) Germany's Economy is facing a severe crisis, with industrialists predicting a contraction of 0.1 percent in 2024. The Federation of German Industry (BDI) forecasts that while the eurozone will grow by 1.1 percent and the global economy by 3.2 percent, Germany will lag behind. BDI head Peter Leibinger warned that the country’s economic situation is dire, particularly in the industrial sector, which has suffered a “structural break” in growth.
Leibinger explained that Germany’s economic challenges are not solely the result of the COVID-19 pandemic or the Russia-Ukraine war, but also stem from longstanding domestic issues. The economy has been grappling with structural weaknesses since 2018, exacerbated by years of postponed reforms and insufficient investments. He stressed the urgent need for public investment in modern infrastructure and the transformation of the economy to ensure its resilience.
The BDI head called for a comprehensive strategy to tackle these challenges, including cutting red tape, investing in infrastructure, reducing energy prices, and strengthening Germany’s innovation and research sectors. Despite the scale of the problems, Leibinger believes they are solvable with the right policies in place.
Leibinger also emphasized the importance of Europe becoming more strategically independent. He urged the EU to leverage its negotiating power to protect its economic interests and foster deeper European integration and competitiveness. Germany, he argued, must lead the way with an ambitious economic policy agenda to guide Europe’s future direction.
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