Germany: Economy Shrinks for Second Consecutive Year

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JAN 15

Above: A large hall at a depth of 38 meters can be seen on the construction site of the second main line at Marienhof during a media visit on the occasion of a tunnel tapping ceremony, Jan. 15, 2025. Image copyright: Matthias Balk/picture alliance via Getty Imagesstory last updated JAN 15

The Facts

Germany's economy contracted by 0.2% in 2024, following a 0.3% decline in 2023, marking the first consecutive years of economic decline since 2003-2004, with the fourth quarter of 2024 showing a 0.1% contraction.
Manufacturing output fell by 3.0% in 2024, while the construction industry saw a drop of 3.8%. According to the European Union (EU), the German economy is expected to grow by 0.7% and 1.3% in 2025 and 2026, respectively.
Export performance saw a 0.8% decline in 2024 compared to the previous year, reflecting increased global competition and challenges in key markets, particularly from China in the automotive sector.

The Spin

Pro-establishment narrative

Germany faces economic challenges, but recovery is within reach. Strengthening integration within the European Single Market, especially in services, and finalizing a free trade agreement with South America can boost growth and competitiveness. Combined with targeted investments in innovation, infrastructure, and climate adaptation, these measures will enhance productivity and restore economic dynamism. With decisive action, Germany can overcome stagnation and secure long-term prosperity.

Econpol Europe FT

Establishment-critical narrative

Germany’s economy is on the ropes, with outdated practices persisting and industries losing competitiveness. Much of this can be traced back to former Chancellor Angela Merkel's tenure, during which essential reforms were neglected, setting the stage for the stagnation that now plagues the nation. Current polling reflects frustration with the status quo and, as elections approach, Germans hope for a new direction that will modernize the economy, address long-standing issues, and restore the country’s global standing.

European Conservative The Telegraph