Frankfurt, Germany (AP) – The European economy stagnated at the end of last year when the former growth motor Germany bumped into a second consecutive year of shrinking output, said civil servants on Thursday.
The gross domestic product was flat with a zero rise in the last quarter of 2024 in the 20-country eurozone, said EU Statistics Agency Eurostat.
The economy delayed the growth of 0.4% in the third quarter, because companies were restless due to possible trading malfunctions under the new administration of US President Donald Trump and because consumers remained careful with expenditure after they had been invested by inflation.
Germany, working under several headwinds, including the loss of cheap energy from Russia, stifled bureaucracy and political paralysis in Berlin, Kromp in the fourth quarter by 0.2%.
The German economy, the largest in Europe, is also shrinking for all 2024 by 0.2%, the second consecutive year of falling production. And the outlook for this year is not much better. The government reduced its 2025 prediction on Wednesday to 0.3% of 1.1%.
Leading economies Germany and France are both restless because of political unrest that companies and consumers have uncertainly left behind what the future has in store in terms of government spending, regulations and taxes. The confusion of Germany could clean up after a national election on 23 February after the collapse of the ruling coalition of the social -democratic Chancellor Olaf Scholz who was entangled in months of Kibbel about what to do about the economy.
It may take longer for France to come from paralysis, because the parliament is deeply divided and a new election is only held until July at the earliest. Political forces are at odds about how they can tackle the large budget deficit of the country.
Business prospects are restless due to the election of Trump, an advocate of new and higher import rates that could harm the export -oriented economy of Europe. Delaying the inclusion of electric vehicles and the cancellation by Germany of purchasing subsidies for EVS has less demand for suppliers of parts. Moreover, consumers continue to be wary of expenditure, although inflation came out of his double digits at the end of 2022.