The German economy faces the risk of recession.

The German Institute for Economic Research warns that the country's economy is nearing recession, as the energy price shock stemming from the Middle East conflict is hindering economic recovery, although not as severely as during the 2022-2023 energy crisis.

Specifically, Germany's growth this year is almost entirely dependent on the public sector, with economic output likely to decline slightly in the spring and summer quarters. Meanwhile, private consumption is recovering slowly, and the export-oriented industrial sector continues to face pressure due to structural challenges and global economic uncertainty.

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If the economy contracts for two consecutive quarters, Germany will fall into a technical recession. In a worse-case scenario, the German economy could shrink by around 0.5% in 2026.

However, a positive sign is that Germany's energy supply remains secure and its dependence on fossil fuels has decreased compared to the time when the conflict in Ukraine broke out.

Experts believe that the German economy has faced a series of shocks in recent years, from the conflict in Ukraine to disruptions in global supply chains, leaving the prospect of recovery highly uncertain.

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Source: https://baoangiang.com.vn/kinh-te-duc-doi-mat-nguy-co-suy-thoai-a488718.html