Sergey Drobyshevsky has outlined the challenges facing the German economy

The expert notes that economic difficulties for Germany began, in essence, with the global financial crisis of 2007–2008. They are based on the processes both of the aging of the population (and, in this regard, changes in consumer behavior) and the specific model of industrial production in Germany. At the same time, the first factor is typical of a situation of «long-term stagnation», when the economic growth rate drops to near-zero levels, but inflation does not accelerate. This situation can persist for decades. Another typical example is Japan.

Germany’s industry has always been export-oriented, with the most high-tech and high-quality products. However, over the past decade and a half, global trade has begun to decline for various reasons (the Trump administration’s policy, the consequences of the COVID epidemic), while China has reduced imports of such products, particularly, because it has mastered the production of many goods on its own and is ready to supply them to the world market.

Sergei Drobyshevsky notes that it is extremely difficult to propose a solution to the issue of economic slowdown in Germany. The example of Japan, which has been experiencing prolonged stagnation for more than three decades, demonstrates the lack of effective and proven methods to overcome this situation. On the other hand, despite low growth rates, this does not lead to a noticeable decrease in the standard of living of the population and a decline in the economic stability. There are currently no real opportunities available for Germany to return to the years of rapid economic growth, sums up Sergei Drobyshevsky, an expert at the Gaidar Institute.