Germany's Economy Stagnates with Near‑Zero Growth

Economist Thorsten Frei argues that Germany has experienced virtually no economic growth over the past seven years. Real GDP in 2024 rose only 0.3 % above pre‑pandemic levels, and the Federal Statistical Office projects a modest 0.2 % increase for 2025. Frei criticises the current government's output, noting that numerous laws, regulations and summit meetings have not translated into tangible economic momentum.

He highlights structural challenges such as the need for reforms in health‑care, pensions, the labour market, tax policy and bureaucracy reduction. Using a hair‑lacquer metaphor, Frei suggests that German firms compare costs, taxes and regulatory risk when deciding where to invest, and that the current environment discourages new capital.

The commentary underscores a broader concern that without substantive policy changes, Germany risks remaining stagnant in a competitive global market.