German economy shrinks for second year in a row

https://www.ft.com/content/1c377688-5ddf-4e31-95d9-15de1e5df2af

by LogicalDinner

18 comments

  1. >The Federal Statistics Office said on Wednesday that Europe’s largest economy contracted by 0.2 per cent last year, after shrinking by 0.3 per cent in 2023. Economists had expected a decline of 0.2 per cent

    Atleast the shrinking is slowing….

  2. The german economy shrinked and they even overcame japan as the third largest economy

  4. Well Germany got hit by a lot of bigger unfavourable events, mainly:

    • Germany has a very export heavy industry and [chinese economy slowed down](https://www.bbc.com/news/articles/crr54x00857o) in the last few years (largest trading partner back then), they somewhat compensated this in the meantime as the [US became the largest trading partner of Germany](https://www.gtai.de/en/invest/business-location-germany/business-climate/us-is-germany-s-leading-trade-partner-in-2024-1809964)

    • The [chinese EV boom](https://www.euronews.com/business/2025/01/13/china-sees-a-boom-in-ev-sales-while-petrol-filled-cars-tank) and lack therefore in western countries is a [big hit on the huge german car manufacturing business](https://www.reuters.com/business/autos-transportation/bmw-group-annual-sales-fall-weak-demand-china-germany-2025-01-13/)

    • Generally, all of the world had to fight the inflation spike, which again is a hit on Germany’s heavy export industry

    • Price shock on the energy markets which hit the very large heavy industries. Prices reduced drastically from the peak but depending on the sector they are still far higher than pre-crisis levels

    • Still fighting spillover effects from COVID, but this affects all countries

    Therefore, things might go into the right direction again – especially as energy prices get down, but another big problem might be Trump tariffs (again hitting Germany’s exports).

  5. If Trump imposes sanctions, the situation will get much worse.
    The article talks about this .

  6. Who could have known that a debt brake and consequently lower public investment would have detrimental effects on the economy. /s

  7. We have been bankrupt for a long time, but we are being fleeced by taxes.

  9. How times change. When I was a child in East Europe in the 90’s I keep getting unsolicited advice that I need to learn german and go there, because it’s paradise.Couple of my friends did this and as far as I know they are really not happy. Glad I did not listen.

  12. Is any economy in europe doing good right now? Im kinda shocked how far the difference between us and the USA is growing. We arent innovative anymore and have no successful companies in tech, semiconductor or AI which are the biggest growth stimulators.

  13. I think increasing taxes on the ultra rich (>60k brutto) might solve it

  15. To all the people saying rich people and companies are not paying their fair share.

    Can you explain exactly how much more money we could raise by increased taxing of the rich and companies?

    Also will increased taxation not dry up private investment in companies making the problem even worse?

  16. They dumped 50k BTC below $60k too showing they lack vision and respect for technology and innovative markets. Harming them (whether intentional or not) rather than embracing them or at least standing back and getting out of the way.

  17. Article just in time for the upcoming elections…

  18. Good, we don’t need no industry, time to go to subsistence agriculture and peasant economy, to please the Brussel bureaucrats and their ideas.

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