Germany: Zeitenwende

Danske Research Team Danske Bank A/S

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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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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