Berlin (Reuters)-Germany’s economy is in a deep crisis, with gross domestic product probably contracting 0.1% this year, said the industrial group BDI on Tuesday (28), putting it on the right track for three years followed by contraction for the first time since the country’s reunification in the 1990s.
At the same time, the euro zone will grow 1.1% and the global economy 3.2%, said BDI, indicating that it will continue with one of the worst economic performances in the region.
“The situation is very serious: the growth of the industrial sector, in particular, suffered a structural rupture,” said BDI president Peter Leibinger.
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Increased external competition, high energy costs, still high interest rates, and uncertain economic perspectives have affected the German economy, which has been contracted for two consecutive years.
Disagreeing on how to boost Europe’s largest economy contributed to the end of the government coalition, with the terrible economic situation reflected in Volkswagen, which has made sharp cost cuts to remain relevant.
The economic crisis is more than just a consequence of Russia’s pandemic and invasion of Ukraine, Leibinger said.
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The problems are and the result of structural weakness since 2018 that governments have not been able to solve, Leibinger said.
“Public investment in modern infrastructure, transformation and resilience of our economy is urgently necessary,” said Leibinger, who also requested a reduction in bureaucracy, lower energy prices and a clear strategy to strengthen the German scenario of innovation and research .
