By Maria Martinez
BERLIN (Reuters) – Germany is in a deep economic crisis, Germany’s BDI industry association said on Tuesday, forecasting a 0.1% contraction in gross domestic product in 2025.
A decline in 2025 would mark the first time since Germany reunified that the country has been in contraction for three years in a row.
While Europe’s biggest economy contracts, the euro zone will grow by 1.1% and the global economy by 3.2%, according to the BDI, which means that Germany will remain one of the currency union’s laggards in economic terms.
“The situation is very serious: Growth in industry in particular has suffered a structural break,” said BDI president Peter Leibinger in Berlin on Tuesday.
The economic crisis is more than just a consequence of the pandemic and Russia’s invasion of Ukraine, he said.
The problems are home-made and the result of a structural weakness since 2018 that governments have failed to tackle, Leibinger said.
“Public investment in modern infrastructure, in the transformation and the resilience of our economy, is urgently needed,” Leibinger said, also calling for a reduction in bureaucracy, lower energy prices and a clear strategy for strengthening the German innovation and research landscape.
With a view to Brussels, Leibinger said it was important for Germany to take on a more self-confident leadership role again and for Europe to become more strategically independent.
(Reporting by Maria Martinez, Editing by Miranda Murray)