The economy is projected stagnate in 2023 and grow by 1.3% in 2024. High inflation is reducing real incomes and savings, damping private consumption. Export growth will recover through 2023 due to easing supply chain bottlenecks and a record-high order backlog. Investor and consumer confidence have improved due to strong energy price support, swift substitution of energy imports from Russia and declining energy prices.
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Read full country noteAfter a decade of strong export-led growth, decreasing unemployment and fiscal surpluses, the COVID-19 pandemic and the energy crisis have revealed structural vulnerabilities and emphasised the need for accelerating the green and digital transitions.
The pandemic is likely to accelerate digitalisation with new business models and increases in demand for teleworking, telehealth services and remote learning. The energy transition requires changes in behaviour, consumption and production. In order to face these challenges while supporting the recovery, Germany needs to boost investment in infrastructure and knowledge-based capital, revive business dynamics and address skills bottlenecks.
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Read full country note2021 Structural Reform Priorities