FACTORS FOR RECESSION IN GERMANY:

1. Unhealthy Economy
 Frugal or Thrifty attitude (advantageous to family, but a huge
drawback towards their country economy)
 Affects various companies and industries (they will forget their
progressing mindset and start saving money by reducing the
employment ratio – leading to recession)

2. Russia – Ukraine War

 This war greatly affects other countries but especially
Germany
 Germany is dependant on Russia for its energy – Russian
gas, oil and coal (with ongoing war, energy prices greatly
increased)
 Major reason why the prices increased was the sabotage of
Nord Stream 2 pipeline which was created to supply gas to
Europe, most importantly to Germany.
 With ongoing war, Germany is going to put additional 100
billion euros in military sector along with an aid package of
3 billion euros being given to Ukraine in 2023.
 In addition to this, they even accepted upto 80 lakhs Ukraine
refugees

This is why this war negatively affects Germany’s economy

3. Trade
 Germany has 2 major exporters: USA and China
 The statistics show that USA and China together buy around
238 billion dollars worth of products
 But this is going to decrease
 Reason being:
- America started its “Made in America” policy
- Since the beginning of this year, China has slowed its
purchases of foreign goods particularly from nations like
Germany in order to focus on supplying its own domestic
market. (Resulting in)
After peaking at 7.9% in 2020, the share of Germany's
exports going to China has been on a steady decline, falling
to 7.5% in 2021 and to 6.8% in 2022
This tells us that the improvement of Germany’s economy
does not majorly lie in their own hands, but depends on
other countries.