Stagnation Continues: German Economy Stagnates in Summer - Germany's Economy Stagnates Amid High Energy Costs and Bureaucracy
Germany's economy is grappling with headwinds, with businesses struggling with high energy costs and excessive bureaucracy. The German Economic Institute (IW) reports that 84% of companies find the country's transport infrastructure a burden. Meanwhile, consumers are cautious with spending due to increased costs of essentials.
Economists predict minimal growth of around 0.2% for 2025. The third quarter saw investment in machinery and vehicles increase, but exports declined. High U.S. tariffs are also hampering 'Made in Germany' goods. Weak demand in key sectors like automotive manufacturing and chemicals is further weighing on the industry.
The German government is responding with a 'growth booster' and a 'construction accelerator'. They've announced economic reforms including a tax investment program, reduced corporate tax, and support for SMEs and tech innovation. However, Commerzbank's chief economist Jörg Krämer notes the lack of real upward momentum in the economy.
Germany's economy stagnated in the third quarter with 0% growth. Businesses and consumers face challenges, but the government's reforms aim to boost competitiveness and promote long-term growth.
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