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Candidates in the upcoming federal election are focused on lowering taxes and increasing public spending.
By Melissa Eddy
German economic output fell for the second year in a row in 2024, according to data released on Wednesday. How to revive it is a central question as the electorate prepares to go to the polls next month to elect a new government.
The economy fell 0. 2% in 2024, after an equally slight contraction last year. Car and machinery manufacturing fell sharply as increased competition, particularly from China, and slowing demand in Europe led to a 3% drop in 2024 production from the previous year. Construction is even worse, 3. 8% less than in 2023.
Germany’s economy, Europe’s largest, has been hit by high interest rates and energy costs, as well as persistent political uncertainty that culminated in the fall of Chancellor Olaf Scholz’s government in November.
The country is expected to post slow growth in 2025, and more than a third of voters named the economy as Germany’s most important problem, the latest polling showed.
“While the threat of too much complacency remains, even after two years of stagnation, the hope is that any new German government will make a decision on a longer-term plan for economic reforms and investment,” wrote Carsten Brzeski, an economist at ING Bank. . . in a note.
Plans about how to return to growth dominate the agenda of every political party as the campaign for the Feb. 23 election heats up.
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