German wholesalers sound alarm as sentiment ‘on the floor’
A worker carries some mushrooms at the wholesale fruits and vegetables market in Hamburg Germany March 13, 2018. REUTERS/Fabian Bimmer/File photo
BERLIN – German wholesalers expect their revenues to fall 2 percent in nominal terms this year, continuing a downward trajectory after a 3.75-percent decline last year, the BGA lobby group said on Wednesday, saying sentiment in Europe’s biggest economy was “on the floor”.
In real terms, the association of wholesalers and exporters expects a 1-percent decline for this year following a 4.25-percent contraction in 2023.
“The results of our current company survey are alarming. While other economies have already recovered, Germany is stuck in an economic dead end,” Dirk Jandura, president of the BGA, said.
Its survey of members showed that sentiment had deteriorated by 8.2 points to 69.4 points in the last year, hit by geopolitics and the challenges of digitalization and decarbonization.
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“Sentiment is on the floor, it is at one of the worst levels in the last 25 years and has returned to levels seen in the coronavirus pandemic. In addition, German government policies are placing a massive burden on companies,” Jandura said.
The BGA criticized the government following a constitutional court ruling in November that forced Chancellor Olaf Scholz to rethink its entire budgetary framework and make unexpected cuts.
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“Reliability and predictability are important factors for companies in deciding on a location. If this is no longer the case, the economy will come to a standstill,” Jandura said.
Some 90 percent of the BGA’s members want big changes including a reduction in bureaucracy and costs.
The BGA expects economic stagnation, chiming with estimates from the Bundesbank, which said last month the economy would barely grow this year due to weak demand from abroad, curbs made to subsidies for a green transition and high interest rates.
