Germany's recovery in danger: BDI warns of third year of crisis!

The industry association BDI predicts another year of recession in Germany in 2025. According to the latest information, the country's economic output is expected to shrink by 0.1 percent. In contrast, the global economy is expected to grow by 3.2 percent and the euro zone by 1.1 percent.

BDI President Peter Leibinger expressed concern about the serious situation and described the mood in the German economy as “miserable”. If there are new special tariffs from the USA, the contraction of the German economy could even increase to almost 0.5 percent. This would be the third year of recession in a row, a development that is unprecedented in German economic history.

Necessary reforms demanded

The new BDI boss particularly criticizes the fact that governments have postponed important reforms in recent years. He calls for a clear agenda for more growth, especially after the federal election at the end of February, and emphasizes that companies need timely signals of relief.

Given limited financial scope, priorities must be set in the budget. The necessary measures include reducing bureaucracy, lower energy prices and investments in infrastructure. The BDI sees the current economic crisis as self-inflicted and is calling for structural reforms.

The majority of industry export expectations have been negative for over 20 months. According to the Ifo Institute, the lowest level of export expectations in a year was recorded at minus 7.3 points. In 2023, German economic output shrank by 0.3 percent, while a decline of 0.2 percent is expected for 2024. However, the federal government expects an increase of 0.3 percent for 2025.

In order to focus on the situation of the German economy, the “Economic Warning Day” will take place on Wednesday, in which over 100 associations and companies will take part, although the BDI is not part of this alliance.