The German economy is in recession for the second consecutive year, with the country’s gross domestic product (GDP) decreasing by 0.2% in 2024 compared to 2023, after a 0.3% decline in 2023 compared to 2022.
Contributing factors include reduced production by major industrial companies such as VW due to lower domestic demand and the war in Ukraine, as Germany stopped importing cheap Russian natural gas and significantly increased its defense spending.
At the end of 2023, VW agreed with unions to cut more than 35,000 jobs by 2030 due to decreased demand, although the company later withdrew its plans to close factories
Elections are scheduled for February 23, after the collapse of the government coalition led by Chancellor O. Scholz. The German recession played a significant role in this.
This is happening as the incoming President of the United States, Donald Trump, threatens to impose tariffs on European products, which could lead to further problems for the German economy.
This is only the second time since the 1950s that Germany has faced two consecutive years of economic contraction, the first being in 2002 and 2003.
The German recession is also impacting Greece, as Germany is a key importer of Greek products within the European Union and may also affect tourism.
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