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Empty loading dock in the Rostock seaport
Photo: Jens Büttner/dpa
Only once in post-war history has the German economy shrunk in two consecutive years - in 2002 and 2003. Now this is looming for the second time, warns the German Chamber of Commerce and Industry (DIHK). She expects economic output to decline again this year. After surveying more than 27,000 companies from all sectors and regions, the association expects a decline of 0.5 percent. In 2023, gross domestic product fell by 0.3 percent.
“The bad mood among companies is becoming more entrenched,” said the business association. Although there have been significantly larger slumps in the past due to the global financial crisis and the corona pandemic, these only led to a shrinkage in one calendar year. However, the business expectations for the next twelve months are now being calculated
35 percent
of companies reported a
deterioration
and only
14 percent
with an
improvement
.
One trend from the survey data is particularly concerning because it could have long-term implications:
33 percent
of companies stated that they wanted to
reduce their
investments
in Germany
.
Only
24 percent
plan to
expand
.
After a brief recovery in the summer of 2023, the negative trend will continue, according to the DIHK.
In the long-lasting crisis of 2002 and 2003, the red-green government under Chancellor Gerhard Schröder responded with the far-reaching labor market and welfare state reforms of Agenda 2010. Now the DIHK is once again calling for decisive action: "The crisis is here," said Managing Director Martin Wansleben . "The government will have to face this." There is no better alternative for the traffic light parties SPD, Greens and FDP than to get started now. Because the sharp interest rate increases to combat high inflation had an effect and slowed down the economy, according to Wansleben.
International business is going less badly than feared. In some cases, even subtle rays of hope can be observed. The problem lies in Germany. Almost three out of five companies now see the economic policy framework as a business risk. “This is a worrying high in our surveys,” says Wansleben. 57 percent are of this opinion. In early summer 2023 it was only 43 percent.
In the DIHK survey, many companies in particular referred to the omnipresent bureaucracy. Wansleben said that the reduction in bureaucracy announced by the traffic light was not yet noticeable in companies. High energy prices, the shortage of skilled workers, weak domestic demand and high labor costs were also cited as business risks. This is increasingly coming at the expense of investments.
Everything must be done that leads to greater supply from companies without at the same time fueling inflation, said Wansleben. For example, bureaucracy could be reduced much more significantly. The DIHK is even calling for the German Supply Chain Act to be suspended, which holds larger companies accountable for deficiencies in their supply chains.
According to Finance Minister Christian Lindner (FDP), the federal government wants to present a concept to strengthen the domestic business location by spring. So far, however, ideas still differ widely. The Greens advocate a special fund for investments financed through debt, while the FDP relies on tax relief and reductions in bureaucracy. Both Lindner and Economics Minister Robert Habeck (Greens) recently described Germany as no longer competitive, while Chancellor Olaf Scholz (SPD) expressed much more optimism.
The federal government wants to officially lower its growth forecast for 2024 from 1.3 to just 0.2 percent next week. “I find this downright embarrassing and dangerous from a social point of view,” said Lindner on Wednesday evening in Potsdam. Germany will thus end up in the bottom group of industrialized countries again. In 2023, there was no Western democracy that performed worse. »If we do nothing, our country will fall behind. Then Germany will become poorer,” said Lindner.
fdi/Reuters