section_path: Crisis
section_name: Crisis
paragraph_text: Crisis
  
  Germany experienced a recession in 2023, which saw the country's economy contract by 0.3% in its fourth quarter and across all quarters of 2023 together, making it the worst-performing major economy globally that year. Germany was estimated to grow slower than all member states of OECD in 2024, excluding the United Kingdom. Economists pointed primarily to Western sanctions of Russia following its invasion of Ukraine, resulting in Germany being separated from a large portion of its energy supply made of cheap Russian natural gas. These resulted in energy shortages and price increases, impacting significant amounts of economic sub-sectors from small local businesses to massive business projects. Germany became the only economy in the G7 to contract in 2023. Inflation was estimated to reach 8.0% in 2022, and reach 7.0% in 2023. Household consumption fell by 0.8%. Dutch bank ING 's global head of macro research Carsten Brzeski stated that Germany had a high risk of recession in 2024 with no predicted short-term rebound, which would mark Germany's first two-year-long recession since 2004. Economists stated that Germany's economy was in a "permanent crisis mode".
  
  In 2024, the German economy entered its second consecutive year of recession. Habeck announced a projected contraction of 0.2% in Germany's gross domestic product (GDP) for the year, drastically reduced from its forecast of a 1.3% increase in 2024. Habeck noted that Germany had experienced sluggish growth since 2018, attributed to a combination of internal structural problems and external global challenges. The country's position in the global economy was described as being "'squeezed' between China and the United States", necessitating a reevaluation of its economic strategies. The announcement followed a 0.1% decline in the prior period, with no growth being recorded for Germany's fifth consecutive quarter. Germany projected the slowest growth among G7 nations for 2024.