QNB: Energy costs and China impact Germany

The German economy is facing significant pressures that impact its competitiveness and growth, due to rising energy costs, structural challenges, and intense competition from China. The industrial sector, particularly manufacturing and small and medium-sized enterprises, is experiencing a decline in production and export capacity, with exports to China decreasing by more than 12% in the first half of 2026, and China's position in the German market dropping to ninth place. Additionally, the German economy faces challenges in modernizing infrastructure, easing administrative burdens, and adapting to global changes. The government needs to implement structural reforms and increase spending to support growth and restore competitiveness, especially since the weakness of the industrial sector affects investment and employment areas and limits broader economic growth.

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