FX.co ★ Germany once again sick man of Europe?

Germany's economic health is more and more often causing concern. The situation is really alarming. Even some improvements cannot guarantee overall well-being. It is highly possible that the country will once again get the status of the sick man of Europe. Curiously, the term was introduced long ago to describe a gloomy economic situation in a particular country.

"Sick man of Europe" is a label given to a nation located in Europe experiencing a long-lasting economic or social crisis. First, it was applied in the middle of the 19th century in relation to the Ottoman Empire. It was losing its foreign policy positions and experiencing serious economic difficulties. This is how the economic slowdown begins. At present, it is Germany that acquired this status. According to the German Federal Statistical Office, in July, industrial orders slumped by 11.7% compared to the previous month. The data was well below the forecast which suggested a 4.3% decline. Excluding large-scale orders, industrial orders would have increased by 0.3% in July.

Thus, the growth in Germany's industrial orders has been low for over ten months. This is more than enough to regain the status of the sick man of Europe, which the country initially received in 1990 after the reunion. Against the backdrop of lower business activity in the industrial sector, analysts at the Kiel Institute revised their outlook for Germany's GDP. Earlier, they expected a rise of just 0.3% in 2023. Now, they foresee a 0.3% contraction by the end of December. The overall situation is considerably shaped by weak demand in China, which is Germany's main trade partner.