Industrial day in Berlin: Chancellor warns of dark economic situation!

Industrial day in Berlin: Chancellor warns of dark economic situation!

The "Day of Industry" (TDI) in Berlin recently was all about the challenges that the German economy must tackle. Numerous top political representatives, including Chancellor Friedrich Merz, were present to discuss the urgent topics of the time. Like DW , BDI President Siegfried Russwurm was concerned about the "lost years" that Germany had experienced in recent years.

The criticism of the government knew many facets, starting with Russian attack on Ukraine, the energy crisis and high inflation. These challenges make it difficult for the German economy to get back on their feet. What does Chancellor Merz say? He emphasized that "turnaround years" is needed to improve the situation and warned of a negative representation of the business location.

economic insights

Peter Leibinger, the new BDI president, sees the forecasts for 2025 as rather dark. The German economy will continue to have difficulty recovering, especially because of global crises such as the customs dispute with the USA and the conflict between Israel and Iran. These aspects could slow down the economic growth process. As SPIEGEL considered a great risk of economic development.

Another damper is that the German economy slipped into recession again in 2024. The gross domestic product (GDP) decreased by 0.2 percent compared to the previous year, which represents the second decline in a row. ZDF pointing out that structural and economic loads play a role here. The industry had to accept a decline in value creation by 3 percent, and investments in machines and systems also fell by 5.5 percent.

outlook for the future

The developments leave a sobering mood. The uncertainties on the labor market help to hold back consumers and that private consumption expenses have only increased by 0.3 percent. The private consumption, which contributes around 50 percent to economic performance, remains an insecure factor.

In order to counteract this, the political representatives announced tax relief, the financial effects of which could estimate a hole of around 48 billion euros in the federal budget. Federal Finance Minister Lars Klingbeil underlined the importance of foreign investments and the need to reduce electricity and gas prices to relieve companies.

With an investment package for infrastructure measures, the modernization of roads, rails and digital networks is to be promoted. But not only the financial aspects are crucial; The bureaucracy and the high administrative costs are also seen as a hedging shoe for the company's ability to act.

Could the next TDI give rise to hope in 2026? Those responsible are optimistic that the situation has improved until then. But the current challenges show that there is still a long way to go to the German economy.