The key message from the International Monetary Fund annual meeting in October 2022 was that Germany would fall into recession in 2023 with the worst ecomomic growth among the major countries. This did not come as a surprise. It showed how difficult it would be for the world’s leading export country to preserve its international competitiveness without access to cheap Russian gas and oil. The Handelsblatt headline of June 28, 2023, laid out
the problem: “Investors on the Run: Germany falling internationally behind. Firms complain about high costs and prefer to invest abroad.” As the German traffic-light coalition of Social Democrats, Greens, and liberal Free Democrats were congratulating themselves for their crisis management after Russia invaded Ukraine, the $132 billion more in foreign direct investment outflows from Germany compared to inflows in 2022 was the highest outflow among forty-four countries. It showed how much international investors had lost confidence in the German economy.
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