Germany's economy shrank for the second consecutive year in 2024
The German economy shrank for the second straight year in 2024 as worried consumers held back on spending and Chinese competition ate into the country’s traditional exports of cars and industrial machinery
BERLIN — Germany's economy shrank for the second straight year in 2024 as worried consumers held back on spending and Chinese competition ate into the country's traditional exports of cars and industrial machinery.
The year's weak performance underlines Germany's status as Europe's worst performing major economy and shows the country as having no meaningful growth in the past four years as it has struggled to deal with major shifts in the global economy.
Gross domestic product contracted by 0.2% last year, following a 0.3% decline in 2023, according to preliminary official figures released Wednesday, weeks before an election in which the economy is the top issue.
The economy is now only 0.3% bigger than it was in 2019, the year before the COVID-19 pandemic.
German business has been battered by external shocks and homegrown problems, unleashing an angst-ridden national debate over how to remedy the situation. Chancellor Olaf Scholz’s three-party coalition government collapsed in November when Scholz fired his finance minister in a dispute over how to revitalize the economy. That paved the way for an early election on Feb. 23.
Contenders to lead the next government have made contrasting proposals on how to inject new vigor into the economy.
Ruth Brand, the head of the statistics office, ticked off the list of short- and long-term challenges: higher energy prices after the loss of cheap natural gas from Russia; high interest rates from the European Central Bank that deter investment in new machinery and vehicles; and
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