Germany’s economy is experiencing its steepest decline in demand since the global financial crisis, as businesses brace for uncertainty following the collapse of Olaf Scholz’s government.
In the latest report from the Ifo Institute, 41.5% of companies reported a shortage of orders in October, up from 39.4% in July—the highest level recorded since 2009.
Klaus Wohlrabe, head of surveys at Ifo, commented: “The shortage of orders continues to impede Germany’s economic progress. Almost no industry has been spared.”
The drop in demand coincides with recent political turmoil, as Chancellor Scholz dismissed his finance minister, triggering the collapse of the coalition government.
Germany narrowly avoided a recession in the third quarter, but the nation now faces the possibility of an election as early as February, with Scholz hinting at a potential parliamentary confidence vote before Christmas.
