global economy
Global Economy
Global Economy
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Candidates in the upcoming federal elections are betting on cutting taxes and expanding government spending.
By Melissa Eddy
Germany’s economic output shrank for a second straight year in 2024, data released Wednesday showed. How to revive it has become a central issue as voters prepare to go to the polls next month to elect a new government.
The economy fell 0. 2% in 2024, after a similarly slight contraction last year. Car and machinery production fell sharply as increased competition, particularly from China, and slowing demand in Europe led to a 3% drop in production from a year earlier. Array Construction was even worse, down 3. 8% from 2023.
Germany’s economy, Europe’s largest, has been hit by high interest rates and energy costs, as well as persistent political uncertainty that culminated in the fall of Chancellor Olaf Scholz’s government in November.
The country is expected to post slow growth in 2025, and more than a third of voters named the economy as Germany’s most important problem, the latest polling showed.
“Even if the risk of too much complacency even after two years of stagnation remains, the hope is that any new German government would decide on a longer-term plan for economic reforms and investments,” Carsten Brzeski, an economist with ING Bank, wrote in a note.
Plans about how to return to growth dominate the agenda of every political party as the campaign for the Feb. 23 election heats up.
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