“Germany isn’t the sick man of Europe, but a tired man in need of a ‘good cup of coffee of structural reforms,” said German Finance Minister Christian Lindner at the World Economic Forum in January 2024. A month later, German Economy Minister Robert Habeck announced that its economy was in ‘troubled waters,’ slashing the economic growth forecasts for this year from 1.3% down to just 0.2%.
Given that the economy shrank by 0.3% in the last quarter of 2023 and the German Central Bank (the Bundesbank) predicted that stress factors would lead to a decline in the first quarter of 2024, Germany could enter a technical recession.
“Consumer restraint, high interest rates and price increases, the government’s austerity measures, and the weak global economy are currently dampening the economy in Germany and leading to another winter recession,” said the ifo Institute’s Timo Wollmershaeuser.
