Olaf Scholz facing fresh crisis as German economy in freefall | World | News

German Chancellor Olaf Scholz doesn’t have much to celebrate this Easter as five of his country’s biggest economic institutes have warned an “ailing” Germany is suffering an ecomomic slow-down.

The collective warning was made citing “low domestic demand, and high gas and electricity prices hitting exports”, according to Euronews.

A six-monthly analysis of the German economy, which is still the third largest in the world and biggest in the EU, was released this week and made grim reading for Mr Scholz.

A buoyant growth forecast for 2024 of 1.3 percent has been slashed down to barely above zero, at 0.1 percent. The report said: “The economy in Germany is ailing.

“An economic weakness that lasted until the end is accompanied by dwindling growth forces. Economic and structural factors overlap in the sluggish overall economic development.

“Although a recovery is likely to begin in the spring, the overall momentum will not be too great.”

The dire prediction pins much of the lack of growth on soaring energy prices which have deeply affected the manufacturing economy of Germany since the Russian invasion of Ukraine.

The EU has stopped its consumption of gas from Putin’s Russia, a resource that Germany was previously heavily dependent on.

Last month, German economy minster Robert Habeck said growth predictions for 2024 were just 0.2 percent, only marginally higher than the dire predictions from the economic institutes.

He said the country was navigating “troubled waters” financially, adding: “Germany’s reliance on exports made it particularly vulnerable to changes in global trade patterns.”

According to the BBC, Mr Habeck said Germany had been hit by a “very specific situation” after the invasion of Ukraine because its energy-intensive industries were dependent on Russian gas.