Industrial figures disappoint Katharina Reiche

Consultations have been held with the Commission regarding a proposed directive aimed at safeguarding workers from the risks linked to ionizing radiation exposure.

In a concerning development, Germany's economic growth is expected to slow down significantly in the coming years. According to the latest forecasts, the country's gross domestic product (GDP) growth in 2022 is projected to be a minimal plus of 0.1 percent, down from a previous forecast of 0.3 percent. This news has sent shockwaves through the industry, with machine builders expressing alarm that the worst-case scenario has already arrived.

The slowdown in growth is attributed to a combination of factors, including high labor and energy costs, bureaucratic burdens, and high taxes. These issues have been causing concern for the machine builders, who are also expressing worries about the low level of orders from within Germany.

The Federal Economic Minister, Katherina Reiche, has expressed her concern over Germany's surprisingly weak start to the second half of the year in terms of industrial data. She has called for immediate action to improve Germany's competitiveness in order to win in the international market.

To address these concerns, Minister Reiche has formed a high-level advisory board. The board includes renowned economists such as Veronika Grimm, Volker Wieland, Justus Haucap from Heinrich Heine University Düsseldorf, Stefan Kolev from the Ludwig-Erhard-Forum for Economics and Society in Berlin, and economic advisor Armin Falk. Uwe Cantner is also part of the advisory group, engaged by the Ministry of Economic Affairs to help combat economic growth risks and strengthen international competitiveness.

The advisory board's focus will be on implementing structural reforms to improve Germany's economic growth and competitiveness. According to Stefan Kooths, the chief economist at the Kiel Institute for the World Economy (IfW), the driving forces for a self-sustaining upswing remain weak. Without ambitious structural reforms, fiscal stimuli are unlikely to go beyond short-term effects, he added.

Juppen Zenzen, an economic expert from the German Industry and Commerce Chamber (DIHK), has also noted that high labor and energy costs, bureaucratic burdens, and high taxes are causing companies to hold back on investments and orders. He stated that orders from within Germany are at a very low level.

Minister Reiche has highlighted energy and labor costs, bureaucracy reduction, and both German and European bureaucracy reduction as key areas to focus on. She emphasised the need for immediate action to address these issues and improve Germany's economic situation.

The new forecast for Germany's GDP growth in 2026 has also been cut from 1.6 to 1.3 percent. Economists had expected growth of 0.5% in July, but this did not materialize. New orders in July were 2.9% lower than in the previous month, according to the Federal Statistical Office, marking the third consecutive decline and the largest since January.

With the advisory board in place, Minister Reiche and her team are hopeful that they can take the necessary steps to revitalize growth forces and strengthen international competitiveness. The future looks challenging, but with the right strategies in place, Germany can overcome these economic hurdles and secure a strong position in the global market.