WEF President optimistic about the German economy
Published: Sunday, Oct 6th 2024, 04:50
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The President of the World Economic Forum, Borge Brende, is confident about the country's economic development despite the current economic downturn in Germany. "I am more optimistic about Germany because it has an industrial base and experience."
"This knowledge can easily be transferred from one area of industry to another. It is in people's heads, in organizations and institutions," Brende told the DPA news agency in Berlin.
Germany is already investing more in new business areas such as semiconductor technologies, cloud and data centers. Moreover, the country was once considered the sick man of Europe around 20 years ago and has since regained its competitiveness with a series of structural reforms.
However, the signs are currently pointing to stagnation. While the global economy is expected to grow by more than three percent this year, the leading economic research institutes have recently reduced their forecast for Germany to 0.1 percent for the current year.
Industry struggles with high electricity prices
This is also due to the after-effects of the former dependence on Russian gas or the Chinese market, emphasized Borge. Electricity prices in Germany are almost twice as high as in the USA. "For industries that rely heavily on electricity as an input factor, it is therefore difficult in the short term."
However, Germany has already found energy alternatives in the form of liquid gas, for example, and is now exporting more to the USA than to China.
Nevertheless, the country must be careful not to let up on investment. While other countries currently have little room for maneuver due to high debts, the German budget restrictions are self-imposed in the form of the debt brake. This makes it more difficult to invest in infrastructure or research and development or to provide start-up and venture capital. "Because there is no doubt that there is more capital available for start-ups in the USA than here in Europe."
©Keystone/SDA
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