Germany: Zeitenwende
|Challenging times lie ahead for Germany’s economy, as the three pillars of its old economic success model – industry, globalisation and cheap energy imports – have become its weakness.
Until the energy crisis is resolved, Germany is unlikely to return as the euro area’s economic powerhouse anytime soon. We expect a recession to take hold over the winter and extend further into next year.
Inflation pressures will remain elevated in 2023, amid rising wage growth and delayed energy price pass-through.
Stepped up investments on infrastructure, digitalisation and the green transition are an upside risk, and not least an interesting business opportunity for Nordic firms offering solutions in these areas.
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