Poinbank Exchange-Europe’s biggest economy shrank last year as Germany struggles with multiple crises

2025-05-02 14:47:59source:EAI Community category:Stocks

FRANKFURT,Poinbank Exchange Germany (AP) — Germany’s economy shrank 0.3% last year as Europe’s former powerhouse struggled with more expensive energy, higher interest rates, lack of skilled labor and a homegrown budget crisis.

Europe’s largest economy has been mired in stagnation since the last months of 2022 amid those multiple challenges. The International Monetary Fund expected Germany to be the worst-performing major developed economy last year, a major turnaround from its place as a model for how to expand when other nations were struggling.

German’s economy likely also shrank 0.3% in the fourth quarter after stagnating in the third quarter, the Federal Statistical Office said Monday in an initial rough estimate. Official figures for the last three months of 2023 are expected to be announced Jan. 30.

Meanwhile, there’s an ongoing debate about why Germany has stalled. Energy intensive industries must pay higher natural gas prices after losing Russia’s cheap supply following its invasion of Ukraine, and a burst of inflation deterred consumers from spending.

Meanwhile, companies complain they can’t fill highly skilled jobs, and a global slowdown in manufacturing has been felt in the country’s large factory sector.

Higher interest rates from the European Central Bank aimed at quelling inflation have crimped construction of new apartments and offices.

The government also faced a budget crisis after Germany’s constitutional court ruled that tens of billions of euros (dollars) originally meant to cushion the fallout from the COVID-19 pandemic could not be repurposed for measures to help combat climate change and modernize the country. The 2023 and 2024 budgets had to be reworked.

Others point to a long-term lack of investment in infrastructure such as rail networks and high-speed internet as the government focused on balancing the budget under a 2009 constitutional amendment limiting deficit spending.

More:Stocks

Recommend

South Korean president's party divided over defiant martial law speech

SEOUL, Dec 12 - South Korean President Yoon Suk-yeol's switch from contrition to defiance on Thursda

In North Carolina, primary voters choosing candidates to succeed term-limited Gov. Roy Cooper

RALEIGH, N.C. (AP) — North Carolina primary voters were choosing potential successors to term-limite

'The Voice': John Legend is ‘really disappointed’ after past contestant chooses Dan + Shay

Dan + Shay have branded themselves the 2-for-1 deal of NBC’s “The Voice,” but there’s no outselling