German economy in « deep crisis »
More than one in three German companies expects to reduce the number of jobs in 2025. A study by the German Institute of Colony Economics (IW), released Friday warns of a « deep crisis ». Although there is some hope in the services sector, industry and construction remain pessimistic, the study adds to which more than two thousand companies were interviewed.
“More than one in three companies expects to invest less this year than in 2024, and about 35% of companies plan to reduce jobs (…) if we ask national companies, this situation won’t change anytime soon,” says the document.
The IW admits that since the fall of 2023, companies’ expectations have been “dark”, with the worst results since the worldwide financial market crisis to be recorded in late 2024.
« Although balance, that is, the difference between optimists and pessimists, has improved in the spring of 2025, the prospects for this year remain dark. The mood is particularly weak in the construction and industry sectors. Only in the service sector there were more optimistic than pessimists at the beginning of the year, » the study.
The inquiry also points out that the « fact that Donald Trump and his administration are currently imposing fees on global trade is causing additional problems on the German industry. »
« The tariff war is putting huge pressure on everyday business, » says IW economic director Michael Grömling.
Germany has gradually freed its dependence on Russian gas after Vladimir Putin’s Russia invaded Ukraine in 2022, and since then Europe has suffered two consecutive recessions, and has been walking to stagnation this year.
