The Federation of German Industries (BDI), one of Germany\u2019s major business associations, has warned the government of Chancellor Friedrich Merz that the economy is facing its worst crisis since the end of the Second World War.\n<\/p>\n
\u201cThe business location is in freefall but the federal government is not reacting decisively enough,\u201d BDI president Peter Leibinger said<\/a> today on the publication of its latest Industry Report<\/a>.\n<\/p>\n \u201cGerman industry is facing a dramatic low point at the end of 2025,\u201d he added.<\/p>\n The BDI expects industrial production to have declined by 2 per cent in 2025 \u2013 the fourth annual drop in a row. This is a revision downward from the previous estimate of only minus 0.5 per cent.\n<\/p>\n \u201cThis is not just a temporary economic dip but a structural decline,\u201d Leibinger said.\n<\/p>\n Germany\u2019s economic malaise is especially striking as the European Union as a whole is leaving industrial recession behind. The BDI expects industrial production to grow by 1 per cent \u2013 up from minus 1 per cent \u2013 in 2025.\n<\/p>\n Globally, it is also on the rise and expected to grow by 3 per cent in 2025, according to the BDI report authors.\n<\/p>\n One main reason cited for Germany\u2019s dire straits are the sky-high energy prices. The cost of electricity shot up in 2022 following Russia\u2019s invasion of Ukraine and has not come down since.\n<\/p>\n That came as the country switched off its remaining nuclear reactors along with many fossil fuel power plants, opting to rely on uncertain wind and solar power instead.\n<\/p>\n