Germany expects a fall in GDP for the second year in a row: new challenges for the economy

Germany predicts a 0.2% decline in gross domestic product (GDP) by the end of 2024. This became known from a Bloomberg report. The fall in GDP is marked for the second year in a row, as in 2023 the country's economy decreased by 0.3% compared to 2022. If the forecast comes true, it would be only the second time Germany has faced consecutive annual GDP declines since the reunification of West and East Germany in 1990.

In a new forecast presented by German Economy Minister Robert Habeck, it is noted that in 2025 GDP may grow by 1.1%, and in 2026 the growth rate will accelerate to 1.6%. However, the country still faces many challenges that require urgent solutions.

Habek emphasized that Germany is currently facing serious structural problems. Among them are a lack of energy security, excessive bureaucracy, a lack of skilled workers and geopolitical uncertainty. These factors have a negative impact on the business environment and the general economic climate.

In July, the German government adopted a number of measures aimed at stimulating the economy. These include initiatives to strengthen both private and public investment, increase the use of renewable energy sources, and reduce red tape. This package of measures aims to improve the conditions for doing business and attracting new investments.

In particular, the program includes tax benefits, incentives for employment, as well as a reduction in electricity prices. However, the government admits that the results of these initiatives may not be visible until next year, which calls into question the speed of the economic recovery.

Thus, Germany is on the brink of serious economic challenges, and despite the government's efforts to stabilize the situation, the country must overcome significant structural obstacles to return to the growth path.