Germany's Economic 'Workhorse' Status Under Strain Amid Structural Crisis

The German Chamber of Commerce and Industry forecasts a 0.2% economic contraction for Germany in 2023, citing a structural crisis. Business expectations are bleak, with many companies pessimistic about their future. Industry is particularly affected, echoing conditions from the early 2000s. Urgent reforms are called for.

The German economy is projected to shrink by 0.2% in 2023, according to the German Chamber of Commerce and Industry (DIHK). This revision from an earlier forecast of stagnation underscores a persistent structural crisis.

Future prospects appear dim, with zero growth anticipated in 2025, marking the third consecutive year of economic stagnation. DIHK managing director Martin Wansleben highlights the severity of the situation, warning that Germany's economic drag could impact Europe.

Survey results from 25,000 companies indicate a deteriorating outlook, especially in industry, where 35% rate their situation as dire. The parallels with the 2002-2003 crisis are clear, prompting calls for urgent reforms to stabilize the economy.

(With inputs from agencies.)