The increase in German government debt and the continuation of Berlin’s negative economic growth

quoted by Deutsche Welle, the German central bank (Bundesbank) has also announced that the government debt ratio of this country, which means the ratio of debt to GDP, for It has reached 63.7% for the second year in a row.

Statistics of the Central Bank of Germany also indicate that the ratio of the country’s government debt to GDP has exceeded 60% for the fourth year in a row. This limit is set according to the Maastricht agreement of the European Union as the maximum amount of the ceiling for the debt ratio of the member countries of this union to their gross domestic product.

According to Deutsche Welle, the amount of debt of the German federal government has increased by 75 billion euros, especially due to the support that Berlin recently provided by setting a price ceiling for gas and electricity in support of consumers and companies.

Last month, the Central Bank of Germany reported that the country has entered an economic recession due to the decrease in domestic and foreign demand for the purchase of German products along with the decrease in domestic investment.

The German central bank has also mentioned the increase in interest rates, which has increased the cost of providing capital through borrowing, as one of the factors in reducing domestic investment in this country.

Since the beginning of Russia’s military conflict with Ukraine in 2022, the price of energy carriers has increased in Germany, causing the industry-oriented economy of this country to experience zero percent or even negative growth for four consecutive quarters.

The central bank of Germany has announced that we have not yet seen the beginning of the improvement of the economic situation in the country, and we will probably see a decrease in the gross domestic product in the country in the first quarter of this year.

This bank has announced that with the continuation of negative economic growth in Germany, this country is probably involved in an economic recession.

The poor performance of the German economy has raised questions about the sustainability of this country’s economic model, and critics say that a significant part of the country’s economy, which is highly dependent on energy carriers and is vulnerable to the increase in the price of these carriers, is Losing the power of competition in the global market, and this issue will eventually lead to a change in the structure of the German economy.

According to IRNA, the German central bank had previously warned that the period of “economic weakness” in Germany could continue longer than expected and that the largest economy in Europe has entered recession.

According to this bank’s report, Germany’s economic recession was due to several reasons, such as a decrease in construction activities, strikes and a decrease in foreign demand.

Source: IRNA