Productivity is recovering, but will probably not reach previous levels. Main reason: population aging.
A economy and Germany it is no longer the “engine of Europe”. Time passes and the statements, the numbers, confirm that the scenario and negative.
Now it has been the renowned Kiel Institute for the World Economy (IfW), which has warned that the long-term growth prospects for the German economy are looking deteriorate (even more). A Germany is losing more and more growth potential.
According to the study by German Government consultants, published this Thursday, the growth rate of potential output is expected to fall from the current level of around 0.5% to approximately 0,3% until 2030.
“Growth is losing substance”indicates the forecast, cited in .
There is a reason main to this bleak outlook: people living in Germany are increasingly old. Natural consequence: reduction in the potential volume of labor.
The increase in competition from China It doesn’t help either.
Furthermore, the so-called stock of capital (machines, buildings and vehicles) is contributing to growth at a historically low level. It will be an indication of long-standing weaknesses in competitiveness.
Productivity is recovering, but will probably not reach previous levels. Persistent structural problems do not allow this.
The study adds that real economic output in 2025 is significantly below the productive capacity of the German economy.
“We are living in a serious crisis in the industry”, highlighted Stefan Kooths, director of the IfW.
These are numbers and words that coincide with those of the Federal Association of German Industry: Germany is going through the deepest crisis on a historical level since the founding of the Federal Republic; and is expected to register a 2% drop in industrial production this year.
“The economic situation is in free fall”, commented Peter Leibinger, president of the association, at the time.
