Forget this week’s minor decrease in the UK inflation number. 

The maximum vital European knowledge releases Germany’s confirmation that, in 2024, its economy contracted for the moment in a row.

Europe’s economy shrank by 0. 2% in 2024, in addition to a contraction of 0. 3% in 2023.

Now, it is observed that it was a very early estimate of the Federal Office of German statistics and that the figures can be reviewed before due time. This precaution of aptitude is adequate this time because, very unexpectedly, the figures recommend that the economy contracted in the last 3 months of the year and that maximum economists expected a modest expansion.

Money Dergest: Guinness Rival Sales Surge 632%

However, if left unchecked, this would verify that Germany has suffered its worst economic stagnation since World War II.

The moment is ugly for Olaf Scholz, the German chancellor, facing the electorate in six weeks.

Worse, it turns out that things appear this year, no matter who wins the elections.

Germany, along with the rest of the world, is watching anxiously to see what tariffs Donald Trump will slap on imports when he returns to the White House next week.

Germany, whose surplus of the industry with the United States is estimated through the Reuters news firm that has reached a record of 65 billion euros (54. 7 billion pounds sterling) the first 11 months of 2024, it is probably a selection objective for such customs duties.

Apart from that, Germany remains assaulted through some of those she has been suffering for some time.

Due to its giant production sector, Germany has been disproportionate through the strong construction in energy costs since Russia invaded Ukraine only 3 years ago, while these brands also suffer an intense Chinese festival. The 3 automobile 3 grains – Volkswagen, Mercedes, Mercedes, -Benz, and BMW, were already hunting in a massive construction in costs due to having to transfer to the generation of electric cars instead of cars that feed through engines of classic internal combustion. This task has more complicated as Chinese EV brands, such as Byd, I have underestimated them in the price.

Other German manufacturers – many of which have not fully recovered from the COVID lockdowns five years ago – have also been beset by higher costs as shown by the fact that, remarkably, German industrial production in November last year was fully 15% lower than the record high achieved in 2017.

The spending of German customers, meanwhile, remains compensated. Consumers have kept their handbag strings closed amid economic uncertainty, while a drop in space costs still has a depressed sentiment. Although home ownership is declining in Germany than many other OECD countries, Germans who own their own homes have a larger share of their household wealth tied up in bricks and mortar than the maximum of their OECD counterparts, adding Brits divided into housing.

The feeling of consumers is also affected through waves of dismissals. The German 500 German corporations, adding large names such as Siemens, Bosch, Thyssenkrupp and Deutsche Bahn, estimated that more than 60,000 workers in the first 10 months of 2024. BOSCH, one of the maximum production corporations admitted in the country, announced in November . It only plans to drop about 7,000 workers.

More of the same is expected in 2025.

Volkswagen shocked the German public in September last year when it said it was considering its first German factory closure in its 87-year history. Analysts suggest as many as 15,000 jobs could go at the company.

As a result, the hopes of a recovery giant are seriously depressed.

As Jens-Oliver Niklasch, of LBBW Bank, put it today: “Everything suggests that 2025 will be the third consecutive year of recession.”

This is not the opinion of Bundesbank, the German Central Bank, whose official forecasts, established last month, is that the economy will expand through 0. 2% this year. But that since its past forecast of 1. 1%, and a growth of 0. 2% growth of 0. 2%, for a tired German electorate, will only feel a contraction of 0. 2%.

And everything is not lost yet. The European Central Bank decreases interest rates more aggressively this year than any of its peers. Meanwhile, an option for anyone who won the German elections would be to eliminate the “debt braking” imposed in 2009 in reaction to the global monetary crisis, which prevents the government from administering a structural budget deficit of more than 0. 35 % of GDP German every year.

The incoming chancellor, who is Friedrich Merz of the Central Center of CDU / CSU, can justify such resolution without problems through the expansion of defense expenses in reaction to Mr. Trump’s requests for NATO members. Mr. Merz also indicated that the policies aimed at supporting decarbonization will have less precedence than the defense of Situiated brands in Germany.

But those are all, for the time being, just things that can take place than the things that will take place.

And the current economic doldrums, in the meantime, will only push German voters to the extreme left-wing Alliance Sahra Wagenknecht or the extreme right-wing Alternative fur Deutschland.