German economy bids goodbye to years of plenty

AFP  :
On his many visits to semiconductor factories and electric car plants, Germany’s Chancellor Olaf Scholz bangs the drum for an economy at the forefront of an industrial transformation.
But the picture painted by business leaders and experts is less rosy, predicting hard times to come for Europe’s largest economy.
Having dipped into recession at the beginning of the year, Germany looks set to finish the year in the red — and at the back of the pack among its eurozone competitors.
The government is the only one left still predicting GDP will grow this year, while the main economic institutes and the IMF are looking at a drop of 0.2 to 0.4 percent.
Soaring inflation, painful interest rate rises, a sluggish recovery in its key export market China, and high energy costs are all weighing on activity.
The malaise might be more than temporary, some analysts warn.
“We currently see the country faced by a growing mountain of challenges,” said Siegfried Russwurm, head of the influential BDI industry lobby.
A growing number of businesses, including small and midsize companies, are working on “moving part of their activities out of Germany”, Russwurm said at the BDI’s annual conference.
In the newspapers, the spectre of Germany as the “sick man of Europe” is back, harking back to the period before 2000 when the country struggled to compete on international markets and faced high levels of unemployment.
Scholz, who became chancellor in late 2021, prefers to point to a different economic era.
In an interview with German media in March, he said the push to achieve climate neutrality by 2045 would bring back “levels of growth like in the 1950s and 1960s”, the age of West Germany’s postwar “economic miracle”.