Insights #8: Relapse. Is the German economy the Sick Man of Europe once again?

After nearly two decades, claims that Germany is the “sick man of Europe” are making a comeback. Germany is the only major advanced economy expected to see its GDP shrink, the IMF contend. Our firm-based performance data reveals a 50% drop in economic profit for Germany’s publicly-listed firms in the first-half of 2023. The resulting crimp on investments by corporate giants like BASF and Siemens ought to be a major economic policy concern. While other EU countries are also experiencing economic profit declines in 2023, falls in Germany are more pronounced — heightening the imperative of reform.