Europre’s largest economy, Germany, is collapsing, posing a threat to the entire continent,” Bloomberg reported.
Germany, which has been considered as the economic engine of Europe for more than a decade, is crumbling, as the political class lacks the leadership to tackle the structural issues that bite at the heart of the country’s competitiveness.
Economists see German growth lagging behind the rest of the region for years to come, and the IMF estimates that Germany will be the worst-performing G7 economy this year.
Germany is unable to sustainably meet the energy needs of its industrial base, and is unable to over-rely on old-school engineering; It lacks the political and business agility to focus on the fastest growing sectors, Bloomberg reported.
The German economy entered a recession for the first time since the height of the Coronavirus pandemic, after it recorded a contraction in the growth rate for the second quarter in a row.
Data from the German Federal Statistical Office showed that the gross domestic product fell 0.3% in the first quarter of this year, and the largest economy in Europe contracted in the fourth quarter of last year by 5.0%.
the German Federal Statistical Office indicated that inflation is still a burden with its record of 7%, which reflected negatively on household consumption, and this is the second time in 3 years that the German economy has slipped into recession, as this happened due to the repercussions of the Corona pandemic in the first half of 2020.
This data came one day after the German Central Bank’s expectations were issued, which indicated that the national economy will resume growth in the second quarter, after the stagnation it recorded in the first quarter.
Thanks to Germany’s mild winter, worst-case scenarios, such as a gas shortage that would have left the economy deeply scarred, did not happen.
Earlier, Wall Street Journal said that industrial production in Germany contracted more than expected in March, driven by a decline in auto production, which indicates weak demand as higher interest rates affected spending.
Germany recorded its highest annual inflation rate in more than 70 years, reaching 7.9% over the course of 2022.