Official announcements from the German government or major news outlets

Germany's Economy Shrinks 0.2% in 2024, Second Annual Decline Since 1950; Q4 GDP Down 0.1%

Jan 15, 2025, 09:14 AM

Germany's economy contracted by 0.2% in 2024, matching estimates and marking the second consecutive year of decline, according to preliminary data from the Federal Statistical Office. This follows a 0.3% decrease in 2023, making it the first time since 1950 that Germany has experienced two successive years of economic contraction. The economy also shrank by 0.1% quarter-on-quarter in the fourth quarter of 2024. The Budget Maastricht deficit widened to -2.6% of GDP, surpassing estimates and the previous year's -2.0%. The downturn is attributed to both cyclical and structural challenges, including overregulation, high energy costs, taxes, shrinking population, competition from China, unproductive mass migration, global tensions, decarbonization efforts, and poor digitization. The outlook for exports remains modest, and a noticeable recovery in consumer climate is not in sight. Experts express concern that the economy is unlikely to grow much in 2025, prolonging the stagnation in Europe's largest economy ahead of upcoming elections where the economy is a central focus.