• After two years of stagnation, the German economy shows no sign of a thorough economic recovery in 2025; trade conflicts and geopolitical tensions are weighing on economic development. 
• In order to overcome stagnation in the long term, Germany needs higher private and public investment, more labor supply as well as more innovation and business start-ups.
• The new German government wants to finance higher military spending and more investment in public infrastructure through massive borrowing. This will only lead to more growth if, at the same time, reforms take place that provide more performance incentives, reduce overregulation and unnecessary bureaucracy and limit government spending.

Prof. Dr. Dr. h.c. Clemens Fuest, President, ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München e.V.