Germany is bracing for a second consecutive year of economic contraction, with the government forecasting a 0.2% shrinkage in GDP for 2024. This follows a 0.3% decline in 2023, marking the first back-to-back recession since 2002-2003. Economic Minister Robert Habeck attributes the downturn to factors such as the loss of Russian gas, challenges in the Chinese market, and an investment backlog.

Despite these challenges, Habeck remains optimistic about future growth, citing a government growth initiative aimed at revitalizing the economy.

The initiative includes measures to boost private consumption and exports, with expected growth rates of 1.1% in 2025 and 1.6% in 2026. However, the construction sector remains a concern, with recovery not anticipated until 2026.