Leading economic research institutes have lowered their forecasts for German economic growth, citing structural problems such as climate change, energy prices, and digitalization. The industry and construction sectors are shrinking, investments and exports are stagnant.
While there are some bright spots in the retail and construction industries, overall, economists predict zero growth or minimal growth for this year. The weak private consumption and the delayed recovery in the manufacturing industry contribute to the stagnation.
Additionally, the rise of the far-right political party, AfD, and the possibility of Trump's re-election pose risks to the economy. In the Eurozone, growth in the second quarter was weaker than expected, with Germany experiencing a slight contraction.
The European Central Bank is considering a rate cut to stimulate the economy. Meanwhile, the German auto industry is scaling back production, but exports have increased.
The uncertainties in global trade and the lack of competitiveness and productivity are challenges that need to be addressed. Overall, the economic outlook is uncertain, and hopes for recovery lie in increasing real wages and potential interest rate cuts by the ECB.
