German Economy Hit by ‘Unprecedented Outflow of Capital’ – CDU Chairman

Economy Minister Robert Habeck earlier admitted that the government's forecast for 2024's economic growth had been revised down from 1.3% to 0.2%.

Europe's largest economy is facing a huge outward drain of funds, Friedrich Merz, the chairman of Germany’s opposition Christian Democratic Union (CDU) party, told the Tagesspiegel newspaper.

This is one of the many problems that German Chancellor Olaf Scholz "no longer notices," Merz pointed out.

"Yes, we have a strong economy. But we also have noticeable weak points [in the economy] that the chancellor simply ignores, for example, an outflow of capital on an unprecedented scale," the CDU leader emphasized.

He also underscored the need to hammer out "an immediate economic program to lift the spirits" of German companies. "We [the country] are probably in worse psychological shape than the economy itself," according to Merz.

The comments come after Bloomberg News reported that Germany’s economic prospects are "looking up after two grueling years of near-zero growth," but added that there will be "no quick fix” for the country’s "enduring industrial weakness."

The authors of an International Monetary Fund survey, for their part, earlier noted that Germany was the only G7 economy to shrink in 2023, and that the country "is set to be the group’s slowest-growing economy again this year."

In the same vein, German Economy Minister Robert Habeck acknowledged that his country is "in troubled waters" when it comes to its economic growth for 2024, and that lack of workers remains “the broader structural problem” for the national economy.