“Credit investors are betting that Germany's difficulties are more than a temporary blip,” the article noted.
As the material points out, economic stagnation, real estate problems and the highest rate of company bankruptcy in Europe have been intensifying since the start of the Ukrainian conflict, which led to a sharp rise in electricity prices for the country's energy-intensive producers.
Experts assumed that after the German economy contracted in the last quarter of 2023, it would experience a slight respite in 2024, but this did not happen.
It is clarified that in Germany, borrowers' demand for investments in equipment, production and technology has fallen sharply, and this may already hamper domestic demand in the long term. Companies are now more focused on coping with the current situation.
“Germany is in trouble. All major industrial economies are slowing, but in Germany this is being exacerbated by high energy prices,” said Barings fund manager Brian Mangwiro.
He also added that Germany also has problems in the automotive sector, since the Germans are actively being replaced by China with an ever-increasing share in the automotive market.
According to a report prepared by the consulting firm Alvarez & Marsal, the crisis is confidently spreading across different sectors of the German economy. Already, about 15% of German companies are experiencing difficulties, which “is the highest figure in Europe.”
Earlier, the media wrote that Germany could become Kyiv’s main donor amid problems with coordinating aid in the United States.