Experts predicts a dark future for the German economy in the coming years

Economists and business experts almost all over the world paint a bleak picture of the German economy in the coming years.

According to experts, German economic growth is likely to be below the average of other industrial countries not only this year, but also in the next two years.

The German Ifo Institute for Economic Research and the Swiss Institute for Economic Policy surveyed nearly 1,400 economists and experts in 125 countries in their quarterly Economist Survey in December.

The survey participants expect the German economy to grow by just 0.4% this year, which is lower than the rates expected in all other industrialized countries.

For 2026 and 2027, the economists surveyed expect growth rates of between 1% and 1.3% respectively in Germany, which is always below the average for other industrialized countries.

“Germany urgently needs a different economic policy that will stimulate growth again… In the international competition for economic positions, Germany has lost much of its attractiveness,” said Niklas Potrafke, an economist at the Ifo Institute.

It’s noteworthy that the German economy had recorded a contraction in 2024 for the second year in a row, which put it into its longest recession in more than 20 years.

Experts’ expectations indicate a growth of around 2.6% this year, and a rate exceeding 3% in the next two years for the global economy as a whole.

Many economic associations see a structural crisis due to the decline in Germany’s attractiveness as an economic location.

The main reasons for this are high energy prices compared to other countries, in addition to the high tax burden and fees, as well as excessive bureaucracy.

Economic policy is likely to be a central issue for the new German government from day one, and this is after holding early elections on the 23rd of this month.

High grid charges are a particularly heavy burden on energy-intensive companies.

The new federal government could introduce measures to ease this burden, but it would cost billions.

The new legislative period could also see discussions about the possibility of disbursing climate aid to offset the higher carbon pricing of fuels and heating.

It’s also unclear how the state will support the construction of new gas plants, which are supposed to act as a backup when the sun is not shining or the wind isn’t blowing enough.

This will determine when the country will abandon coal for energy production.