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Germany has failed to grow in any two consecutive quarters since Olaf Scholz’s Cabinet took office in late 2021
Germany’s economic trajectory leaves much to be desired, according to Finance Minister Christian Lindner.
“The German economy is treading water – we cannot be satisfied,” the country’s finance chief told reporters in Luxembourg on Monday (Oct 7). “We are experiencing structural change combined with a loss of competitiveness.”
Germany has failed to grow in any two consecutive quarters since Olaf Scholz’s cabinet took office in late 2021. Lindner spoke at the start of a pivotal week of economic data, which already kicked off on a negative note with dire numbers on factory orders. Industrial production figures are due on Tuesday, followed the next day by the latest economic forecasts from the government, which are set to be revised to a 2024 contraction.
“Our economic model is not broken, but we have lost competitiveness for about a decade, and so we are introducing supply-side measures to return to growth,” Lindner said. “We need an economic upturn, and we are focusing on mobilisation of the labour market, tax, benefits, we have to partly reconsider our energy policies, and then after this reform agenda, Germany will have more competitiveness again, and then you will see there is turnaround potential.”
The economy might already be in recession: The Bundesbank observed last month that gross domestic product may have stagnated or fallen in the third quarter, following a slight drop in the prior three months.
Lindner is probably in his final year as finance minister, as his Free Democratic Party is struggling in polls ahead of general elections scheduled for next September. BLOOMBERG