With almost a month to go before the February elections, dark clouds are thickening over the German economy, reports a report in Deutsche Welle. According to the German media outlet, the latest figures released by the German statistical office show that Germany has slipped into a recession for the second year. German GDP shrank in 2024 by 0.2%, compared to 0.3% in the previous year, 2023.

The head of the Federal Statistical Office Route Brandt said the two-year recession was due to deep structural problems in the German economy. Added to these are the pressures on the German economy from China and unfair competition, as well as the previous years of energy crisis following the Russian invasion of Ukraine.

According to an analysis by the German radio station DLF, another key reason pushing the German economy into recession is the 0.2% decline in German exports, on which the German economy depends, the crisis in the construction sector, and the failure to converge between wages and market prices, given that German consumer sentiment has declined in recent years.

The early elections, the long consultations on government formation in Germany that will follow, the lack – for now – of a budget, and Donald Trump’s pending decisions on US economic policy and his plan for a return to protectionism are also creating additional uncertainty in the German economy.