Why the German economy is in a rut

© Khunaspix Dreamstime.

Germany has been Europe’s last bastion of economic health. But, as it approaches a technical recession, in which its economy is expected to contract for the third consecutive quarter, The Economist asks why. There are some surprising facts along with the better known problems that German exporters are facing in selling to weakened economies in the Eurozone, China and Russia. But its energy prices, already among the highest in Europe, have risen further still, triggering some manufacturers to relocate – including BMW, which moved to the US where energy prices are 80% lower. In nearby Hungary, industry is booming, while German industrial production in August fell by 4%. And the future? The economy may not grow until the middle of next year.