It's cold all over Europe: our economic engine is starting to fail
Germany is known regionally and globally as the economic engine of Europe. Unfortunately for all of us, the German economy seems to have some pretty big problems, and this can have negative consequences for many other states.
According to the latest economic data released by the Berlin authorities, Germany's economy faces major challenges. 2021 ended with a strong slowdown in economic growth, and restrictions on the pandemic as well as supply chain pressures continue to grind this regional economic giant.
The German economy contracted between 0.5% and 1% quarterly in the last quarter of last year, the German Federal Statistical Agency said. Germany is the first major economy to publish a preliminary estimate of GDP in 2021.
Referring to the evolution for the whole year 2021, the German GDP grew by about 2.7% in annual terms, remaining 2% below the level of 2019. The fact is that the economic analysis estimates an increase of 5% for the euro area and 5.8% for the USA.
At the same time, official figures also show that German inflation rose to 5.3% in December, the highest level in almost three decades, so in addition to all the pre-existing problems, the Germans have to deal with endured And waves of price increases, just like the rest of Europe, by the way.
Analysts are also sounding the alarm. That Germany suffers from its dependence on exports, which support about 30% of local jobs, about four times more than in the United States (USA).
Large German industries, especially the automotive industry, are almost destroyed during this period due to problematic supply chains. The chip crisis, for example, continues to put a lot of pressure on the car industry. Unfortunately, some experts in the field do not expect an improvement in the situation before 2023.
Tensions are strongly felt by the German private sector. Thus, one in seven German companies fears for their existence.