Business

Germany's economy has contracted for the second year in a row—the first time this has happened in over 20 years—as the country prepares to vote next month to either elect a new chancellor or keep Olaf Scholz in office.

Official figures released by the government show that Germany's GDP fell by 0.2% last year, following a 0.3% decline the previous year. The last time Germany experienced two consecutive years of economic decline was in 2002 and 2003.

"The early 2000s were the last time Germany received the very flattering title of ‘sick man of Europe.’ History doesn’t repeat but it rhymes,"said Carsten Brzeski, an analyst at Dutch bank ING.

The German economy is under significant pressure, with industries scaling back production due to weak domestic demand, soaring energy prices, and increasing competition from cheaper Chinese imports.

Manufacturing output fell sharply in 2024, down 3% compared to the previous year.

Late last year, Volkswagen, one of the country’s largest employers, reached an agreement with unions to cut at least 35,000 jobs by 2030, citing declining demand as a key factor.

(QG - Source: The Guardian / Picture: © Pixabay)