Germany: Economy Declines, from GDP to Investment and Consumption
Staggering losses: cyberattacks cost German companies more than 148 billion euros in 2023
Germany’s economy recorded a 0.1% decline in the second quarter of 2024 compared to the previous three months, thus confirming itself as the “sick man of Europe.” According to Ruth Brand, head of the German statistical office Destatis, “after a small growth of 0.2% recorded between January and March 2024, the German economy cooled down again in the spring.”
There was certainly no shortage of negative data in Germany between April and June: private consumption fell by 0.2% after a slight increase of 0.3% at the beginning of the year compared to the fourth quarter of 2023. “Official” German government forecasts point to “zero growth” for Germany in 2024; fundamental data continues to disappoint, with gross fixed investment falling significantly in the second quarter of this year after a slight positive in the previous quarter. Adjusted for price, seasonality, and calendar effects, investment in equipment – that is, mainly machinery, equipment, and vehicles – fell 4.1% compared to the January-March 2024 period, significantly more than investment in real estate: the index fell 2.0 percent.
Foreign trade lacked positive momentum: exports of goods and services adjusted for price, seasonal, and calendar effects declined by 0.2% in the second quarter compared to the previous three months.
In this context, the consumer confidence index for September, published on Tuesday, September 27, was “dark,” unexpectedly ending up at a negative -22 points compared to the previous -18.4 points, well below economists’ forecasts (-18), while exporters’ expectations, caught between the hammer and anvil of the trade war between the EU and China, fell to negative -4.8 points in August compared to -2.2 in July.
Finally, cyberattacks have laid like boulders on corporate budgets, costing German companies an astronomical €148.2 billion in 2023. Such data was released by the Bitkom association, which represents more than 2000 digital companies in Germany. In 2021, there were 9% of German companies that considered cyberattacks “a threat to their economic existence”; in 2023, Bitkom emphasized, the share rose to 52 percent.
