Germany is set to remain at the bottom of the league of industrialized nations, with a projected growth rate of just 0.4% by 2025, according to the latest Economic Experts Survey conducted by the ifo Institute and the Institute for Swiss Economic Policy. The survey, which gathered insights from 1,398 economic experts, paints a concerning picture of Germany’s economic trajectory.

“Germany urgently needs a shift in economic policy to reignite growth,” warned ifo researcher Niklas Potrafke. He emphasized that Germany has lost significant ground in the global competition for business attractiveness, calling for market-oriented reforms from the government to address these challenges.

On a global scale, economic growth projections appear more optimistic. The surveyed experts predict a 2.9% global growth rate for 2025, a modest increase from the 2.6% forecast for 2024. Africa (3.9%) and Asia (3.8%) are expected to see the strongest growth, while Europe (2.1%) and North America (2.4%) anticipate more modest increases.

Looking ahead, the outlook for the global economy remains positive, with 3.2% growth projected for 2026 and 3.1% for 2028. While Germany’s growth expectations improve slightly to 1% in 2026 and 1.3% in 2028, they still fall significantly below the average of other industrialized nations.

The findings reinforce growing concerns about Germany’s economic stagnation, highlighting the urgent need for policy changes to enhance competitiveness and stimulate long-term growth.

Source: ifo Institute and the Institute for Swiss Economic Policy

The 2024 Corruption Perceptions Index (CPI) has revealed that corruption remains a critical global issue, obstructing sustainable development and environmental efforts. Despite some positive changes in 32 countries since 2012, corruption levels have stagnated or worsened in 148 nations. The global average score of 43 has remained unchanged for years, with over two-thirds of countries scoring below 50.

Corruption is also a major threat to climate action, hindering both greenhouse gas reduction initiatives and adaptation strategies. Misuse of funds meant for climate protection is widespread, and undue influence from powerful industries weakens environmental policies, leading to further ecological damage.

Illicit financial flows remain a significant concern. Many high-ranking CPI countries possess the resources and influence to lead global anti-corruption and climate protection efforts. However, several of these nations prioritize the interests of fossil fuel industries and house financial hubs that attract illicit funds linked to corruption and environmental destruction.

François Valérian, Chair of Transparency International, stressed the urgency of addressing corruption, stating: “Corruption is a growing global threat that not only hinders development but also fuels authoritarianism, instability, and human rights violations. Tackling corruption must be a top priority for every nation and the international community to ensure a peaceful, free, and sustainable world. The dangerous trends revealed in this year’s CPI highlight the need for immediate and concrete action.”

The CPI assesses 180 countries and territories, ranking them based on perceived levels of public sector corruption. Scores range from 0 (highly corrupt) to 100 (very clean), offering a comprehensive overview of global transparency and governance.

The German economy is facing significant challenges, with the federal government recently slashing its growth forecast for 2025 from 1.1% to just 0.3% in real terms. The decline is evident across industries, as nearly one in three German industrial companies is either relocating its research and development operations abroad or considering doing so. Meanwhile, Germany’s attractiveness as a production hub continues to diminish due to rising energy and labor costs, stringent regulations, and bureaucratic inefficiencies. These pressures are now also being felt in the logistics real estate market.

In late January, over 100 associations and businesses joined forces for “Economic Warning Day,” calling attention to the dire state of the economy. However, political responses have been muted. Meanwhile, the re-emergence of Donald Trump as a major political force in the U.S. introduces another disruptive factor. His threats of import tariffs and tax incentives to lure companies to the United States pose a serious risk to European industries, particularly those reliant on exports, such as mechanical engineering, automotive, and pharmaceuticals.

To counteract these threats, a comprehensive strategy is required—not just for Germany, but for all of Europe. Former Siemens CEO Joe Käser recently highlighted the problem, noting that while Europe is committed to doing the right things, it lacks focus, execution, and, most critically, speed. The solution must be a unified effort—what could be called a MEGA project: “Make Europe Great Again.”

Germany urgently needs an economic turnaround. However, standing strong against increasing competition from Asia and the U.S. will require more than isolated national efforts. Instead, a united European approach is essential to revitalizing the domestic economy and ensuring long-term economic stability.

Source: Analysis of the Current Economic Landscape by Kuno Neumeier, CEO of Logivest and Spokesperson for the Logistics Real Estate Theme Group at BVL