Germany recognized the catastrophic situation in the economy

The situation in the German economy is experiencing the longest crisis and causes serious tension for Chancellor Friedrich Merz. This is reported by Bild.

The publication noted that the German Chancellor expects next Thursday, when the Federal Statistical Office will present revised economic indicators for the third quarter, covering the period from July to September. These will be the first unofficial data for the German government, and they are important for understanding "whether there is hope for an economic recovery or whether the economy will continue to shrink."

It is noted that the current situation causes tension for the Chancellor, as the German economy is experiencing the longest crisis to date. In particular, since the beginning of 2023, companies have started producing fewer goods, and economic indicators continue to fall. In August, the unemployment rate reached 3 million, which is the highest in the last ten years.

In addition, it is reported that researchers at the Ifo Institute analyzed changes in economic indicators, public spending and private investment over the past ten years. According to them, government spending, such as funding pensions, schools and infrastructure, has been steadily increasing since 2015 and increased by 25%. At the same time, companies' investments in new technologies and equipment have been declining for several years and are now at the level of 2015. Gross domestic product has remained unchanged since 2018, except for a short-term drop during the coronavirus pandemic.

It is expected that a decrease in private investment in the medium term will lead to lower growth, lower tax revenues and, accordingly, a decrease in funds for government benefits. At the same time, the standard of living of German citizens has already begun to stagnate, and the German economy faces the threat of "Italian conditions" — a prolonged economic depression.