In the second quarter of 2024, Germany continues to experience negative GDP growth, while the Eurozone as a whole is experiencing significantly positive growth (+0.3%).
We wonder about the causes of Germany’s difficulties, which stem from :
- weak exports, particularly to other European Union countries and China, which may be the result of Germany’s productive specialization;
- Weak corporate investment, linked among other things to declining profitability;
- Weak household consumption, with a rising savings rate;
- restrictive fiscal policy, with the introduction of the “debt brake”.
Germany’s growth recovery will be difficult, since it will require an improvement in productive specialization (with a move upmarket), a rise in corporate profitability, a return to household confidence, and greater flexibility in fiscal policy rules.
