QNB: Energy Costs and China Challenge German Economy
A report from Qatar National Bank (QNB) concluded that the German economy is suffering from a significant downturn due to rising energy costs and increased competition from China. The industrial sector, including manufacturing and small to medium-sized enterprises (SMEs), has been performing poorly. The report highlighted that Germany, once a leading economic power in the Eurozone, saw its real GDP contract in 2023, entered a recession in 2024, and is expected to experience only modest growth of 0.2% in 2025. Challenges facing the country include aging infrastructure, lack of investment, and a 15% decline in industrial performance from its peak in 2017. Additionally, the report noted that German exports to China fell by over 12% in the first half of 2026, and the pressures from increasing energy costs are weakening the industrial sector, which accounts for about 20% of GDP, thereby hampering growth and employment prospects, ultimately impacting the overall economy.
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