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| German economy continues to be under pressure. (Source: Getty Images) |
In its latest report, the International Monetary Fund said Germany could be the only major economy to contract this year. In addition, the Organization for Economic Cooperation and Development said Germany's economy will be hit hard by a global slowdown, as weaker trade and higher interest rates around the world continue into 2024.
Due to stagflation, with persistently high inflation combined with high unemployment and low demand, Germany fell into recession in late 2022 and early 2023, and most forecasts suggest that the economy will shrink by 0.6% in 2024.
Meanwhile, as the largest car market in Europe, the German auto industry is considered a strength of this country. However, this sector is also facing one of the biggest challenges: competition with China, with its superior technological advantage.
Nearly 98% of Germany's vehicles still use internal combustion engines, leading analysts to say that plans to put around 15 million electric vehicles on the market by 2030 are too ambitious and unachievable.
Germany is also facing a budget crisis.
In mid-November 2023, the German Constitutional Court rejected the government 's plan to reallocate about 59.15 billion euros ($64.84 billion) in loans during the Covid-19 pandemic to boost the economy.
In addition, climate change and adverse weather conditions could also put pressure on the German economy.
Germany saw heavy rains and floods last year and the situation is expected to continue this year.
Adverse weather conditions have impacted Germany's energy sector, particularly oil and gas production.
(according to Euronews Business)
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