Alarm for the economy: BGA President calls for drastic reforms!

Alarm for the economy: BGA President calls for drastic reforms!

The economic challenges in Germany are getting worse. Dr. Dirk Jandura, President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), was critical of the current GDP figures for the second quarter of 2025. He noted that the latest figures show a decline in gross domestic product (GDP), which is largely due to weak foreign trade. Jandura emphasizes the urgency of reforms to increase the competitiveness of Germany as a business location. In his opinion, Germany is “too expensive, too complex, too bureaucratic and too slow,” which poses major challenges for companies.

The negative development of GDP is interpreted as a warning signal for wholesalers. Jandura points out that declining economic performance leads to lower demand, which translates into fewer orders and increasing price sensitivity among customers. In view of the difficult foreign policy situation, he is calling on the Federal Government to take faster and clearer measures to stimulate the economy.

Annual economic report and structural challenges

As part of the annual economic report, which the Federal Cabinet approved on January 29, 2025, the economic and financial policy priorities as well as the economic forecast for 2025 were determined. The report shows that the German economy is in a difficult situation after two years of stagnation. In 2024, growth impulses came primarily from public and private consumer spending, while investments declined and the export-oriented industry suffered from rising production costs.

The federal government expects price-adjusted GDP to increase by 0.3 percent in 2025, but domestic demand will initially remain weak. Private consumer spending is expected to increase by 0.5 percent, while equipment investments are expected to increase by 1.1 percent. Nevertheless, a decline in construction investment of 0.6 percent and a slight decline in exports of 0.3 percent are expected. In comparison, imports are expected to increase by 1.9 percent.

Reforms and measures by the federal government

In view of this tense situation, the annual economic report identifies four central structural challenges: the geopolitical turnaround, demographic aging, climate change and neglected location factors. In response to these challenges, the federal government has taken measures to reduce bureaucracy and improve planning and approval processes. In addition, reforms were implemented to make better use of the labor force potential and to stabilize earning capacity.

Another important aspect is the stabilization of the energy supply during the energy crisis and the accelerated expansion of renewable energies. The federal government is pursuing a moderately restrictive fiscal policy course in order to reduce fiscal leeway. In terms of climate policy, the report sets the goal of reducing greenhouse gas emissions by at least 65 percent by 2030.

The aim of these measures is to improve the quality of life and to place welfare-relevant aspects at the center of economic policy. Jandura and the annual economic report make it clear that the time has come for decisive reforms to make Germany competitive again.

The urgency of change and the need for reform are clear messages from both the BGA reported as well as in the Federal Government's annual economic report shown are. The need for action is obvious and the coming months will be crucial for Germany's economic recovery.