The European Commission recently lowered its economic growth forecast for the EU in 2023 from 1% to 0.8% compared to its previous forecast. The main reason is that Germany, Europe’s largest economy, will face a recession this year. In addition, the EU’s growth forecast for next year has also been adjusted from 1.7% to 1.4%.

Germany has been severely hit by its manufacturing industry since the Russian-Ukrainian conflict in February last year because of the need to quickly end its energy dependence on Russia. This has directly led to a decline in Germanys overall economy. Data from the European Commission show that Germanys GDP is expected to decline 0.4% this year. Previous forecasts had expected Germany to economic growth in 2023, but now it seems that this is no longer possible. In addition, Germanys economic growth forecast for next year has also been adjusted, from 1.4% to 1.1%.

The decline in the German economy has put more pressure on Europe, and some economists have again used the term European sick man to describe Germany, which originated in 1998, when Germany was facing economic challenges.

European Commissioner for Economic Affairs, Jean-Claude Juncker, stressed that Germanys economic situation will have an impact on other European countries, saying: If the EUs largest economies have a negative growth, even a slight one, it will affect all countries.

In addition, the data showed that in the first eight months of this year, Chinas trade volume with the EU fell by 1.5%, to 3.68 trillion yuan. China has been Germanys largest trading partner for seven consecutive years, but this year, 1-7 July, China-German bilateral imports and exports gross amounted to 8544.6 billion yuan, down 1.5% compared to the same year.

European Commission Executive Vice-President Dombrovskis said the current economic uncertainty is very high and needs to pay close attention to future risks. German economic uncertainty undoubtedly puts more pressure on Europe, and the future economic development trend in Europe is still full of variables.