Germany’s economy shrank in 2024, for a second year. As Europe’s leading economy, and the world’s third largest, that’s not only bad news for Germany but all of us.
In fact, Germany hasn’t grown for five years, an extraordinary turn-around for a country whose real gross domestic product (GDP) rose by an average of 1.7% annually between 2010-2019, and remains synonymous with industrial production.
There is no doubt Germany is facing substantial challenges, ranging from the climate transition and demographic shifts to a tense geopolitical landscape with profound implications for trade, supply chains, and security. Its GDP per hour is about 30% lower than that of leading European nations and the US, and it has lost around 250,000 manufacturing jobs since the start of the pandemic.
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