What role do strategic investments play in Germany's economic resurgence?

Event materials: German Council of Economic Experts Annual Report 2023/24

As Europe's largest economy and the fourth-largest globally, Germany is making efforts to address impending labor shortages and boost its long-term economic growth. Policymakers are urged to prioritise skilled immigration, enhanced employment incentives, and the adoption of new capital goods. The German Council of Economic Experts (GCEE) projects a historic low in medium-term growth, emphasizing the need for strategies to counter the decline in labor volume through increased productivity growth. At this event we discussed the requirements for urgent policy decisions to create a conducive environment for capital and labor reallocation, with a focus on substantial investments in machinery, software and AI. Overcoming declining investment rates necessitates improvements in digital infrastructure and streamlined approval procedures. Strengthening both domestic and foreign direct investment will play a pivotal role in stabilising potential output growth, offering increased capacity for resource allocation and economic expansion.