Germany’s economy will probably shrink for a third year in 2025, according to the German Chamber of Commerce and Industry.
A survey of about 23,000 companies across all sectors and regions of the country showed that “significantly more firms continue to expect worse business than better,” the lobby group — known as DIHK — said in a statement on Thursday. Based on the results, it expects gross domestic product to decline by 0.5% this year.
Three consecutive years of contraction would be the “longest period of weakness in Germany’s post-war history,” DIHK’s Helena Melnikov said. “This is a turning point and underscores the urgent need for action.”
Some 60% of companies cited the economic policy framework as the top risk to their business, making it “all the more urgent for politicians use their repositioning after the federal election to finally provide clear growth impulses again,” she said.
DIHK’s forecast for 2025 is more pessimistic than official predictions, with the Bundesbank predicting growth of 0.2% and International Monetary Fund seeing 0.3%.
The economy has been a core theme ahead of the Feb. 23 snap election, which is set to see Chancellor Olaf Scholz ousted by conservative challenger Friedrich Merz, according to opinion polls. The latter has made reviving growth a top priority for when he enters office.
Written by: Zoe Schneeweiss — With assistance from Iain Rogers @Bloomberg
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