“In no other country is such a bad mood as in Germany.”

The Federal Statistics Office announced this week that German industrial production fell by 1.6% in December. It was the seventh consecutive decline – and the most serious since March 2023. Moreover, economists expected the German result to fall by just 0.5%.

This is just one piece of bad news. Recently, only Germans get these. As a result, German companies increasingly fear that… The economy will decline. This shows, among other things, a study conducted by the consulting company EY, to which Die Welt journalists had exclusive access.

There are also concerns about… Populist movements – Whether in Germany or around the world.

EY examined nearly 1.2 thousand CEOs around the world (including 100 from Germany). All survey participants have in common that they expect weak global growth in 2024. At the same time, they believe that inflation will remain a problem and that interest rates will remain high for some time.

The Germans have no reason to be optimistic

The situation is not rosy anywhere. but The outlook in Germany is much bleaker than in other places. This is reflected in the expectations of the company's leaders in terms of sales volume and profits. Nearly two-thirds of executives worldwide believe they will continue to grow. In Germany, just over half of respondents expect this.

However, there is something else crucial: in Germany, it is 18% and people expect their profits to fall – a figure that is higher only in Mexico. In France, only 10% expected this. managers, and in the USA – only 5%.

— At the moment, in almost no other country the mood is as bad as in Germany – said Konstantin M. Gall, Head of Strategy and Transactions at EY for Western Europe. plays an important role here International orientation German companies. This means that Germany faces many threats – from… Elections in the United States of America After the war in Ukraine and the crisis in the Middle East.

This is what happens A number of internal problems. – At the moment, there is almost no stimulus in Germany that can guarantee economic recovery, added Constantin M. expensive. Instead, there is a lot of uncertainty among businesses because political requirements, as well as general conditions, are constantly changing. — Lack of security planning is poison for long-term investments, added Constantin M. Gall.

Berlin city center (illustration)

“They will be left behind forever.”

Businesses are also shutting down Excessive bureaucracy. Many bureaucratic hurdles can be alleviated through Comprehensive digitization. This change would significantly speed up the decision-making process and necessary actions. But very little has been done in Germany on this issue for many years.

All of this frustrates German leaders to the point that they are increasingly investing in places with a more business-friendly climate: abroad.

“It is uncertain whether Germany will be able to maintain its strong position in the global economy in the medium term, and this raises concerns among business leaders,” concluded Constantin M. Gall.

Concerns are exacerbated by the development of populist movements. The vast majority of corporate CEOs around the world say they find the rise of populists challenging. However, in Germany it is more pronounced. In this country, 42% agree with this statement. Participants (compared to 34% globally).

Many economists share this view. “Germany is at risk of being left behind forever,” said Harald Pressler, chief economist at investment firm Panteleon. This is because the country is suffering from a structural growth crisis, not an economic crisis. They can only be overcome through sustained and faster productivity growth.

Continued article below the video

Emergency

– However, there is no money for the necessary government investments in infrastructure, digitalization, improving the financial resources of research institutions or providing venture capital for startups, added Harald Pressler. Especially since The Bundestag has suspended the debt brake again.

As a result, much-needed investments will only be possible through the declaration of a state of emergency.

Reforms will be possible even if debt control is committed. However, it is feared that the political courage for the 2030 Agenda, which promotes economic growth, will only emerge with… Another serious crisis. The good news is that we won't have to wait long, Harald Pressler said.

However, companies do not want to wait that long and are planning to take action now. For many of them, the most important thing is to reorganize their supply chains – and this often involves replacing or supplementing supplies from China with suppliers from other countries. However, this is followed by plans to withdraw from certain areas of activity, postpone investments or cancel them completely.

Experts recommend caution

This is particularly evident in the case of investments involving corporate acquisitions or mergers. Currently only 30 percent of companies surveyed around the world are planning at least one merger or acquisition in the next 12 months – before the quarter the figure was 35%, and six months ago – as much as 59%.

However, in Germany, the proportion of companies planning such transactions has decreased significantly – from 62 percent. Six months ago to only 20 percent. This is the lowest result since the research began in 2010. It reflects this phenomenon Uncertainty in the German economy.

Echo Richards

Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.

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