Germany's Economy Shrinks 0.2% in 2024, First Two-Year Decline Since 1950

Jan 15, 2025, 09:42 AM

Germany's economy contracted by 0.2% in 2024, marking the second consecutive year of decline, according to preliminary data from the Federal Statistical Office (Destatis). This follows a 0.3% drop in 2023, representing only the second time since 1950 that Europe’s largest economy has shrunk for two consecutive years. Unemployment has risen for 24 months, the longest stretch in over 35 years. The fourth quarter of 2024 saw a quarter-on-quarter decline of 0.1%. The contraction is attributed to pressures across various sectors, particularly manufacturing and construction, amid challenges such as high energy costs, overregulation, and global economic tensions. The downturn comes ahead of national elections set for February 2025, with the outlook for 2025 remaining subdued and minimal growth expected.