Germany’s economy contracted by 0.2% in 2024, continuing the decline that began in 2023 (-0.3%).
The reasons include growing competition in export markets, high energy prices, elevated interest rates, and economic uncertainty, according to the Federal Statistical Office (Destatis).
The manufacturing sector reduced output by 3% in 2024, with the machinery, automotive, and energy-intensive industries particularly affected. The construction sector saw a 3.8% decline due to high prices and interest rates, resulting in decreased residential construction volumes.
The service sector grew by 0.8%, with notable increases in information and communications (+2.5%) and government-related sectors (+1.6%). However, stagnation was observed in trade, transportation, and hospitality.
The data has been released as Germany prepares for snap elections, where key topics are expected to include reforms to support the economy and enhance the country’s competitiveness.
