A solid and diversified economy, a robust tax framework and a highly competitive external sector. These are the reasons that convinced Scope rats To confirm the AAA/Stable rating for Germany.
“However – underlined the European rating agency – they persist criticality related to structural reformsto the challenges of the transition for highly energy -intensity industries, to aging of the population – with consequent increase in pension liabilities – and to vulnerability related to geopolitical risks global “.
Growth estimates
“There solid industrial base of Germany in the automotive sectors, the construction of machinery and chemicals, in addition to the different and competitive small and medium -sized enterprises, or “Mittelstand”constitute the spine of the economy oriented enlargement “
He stressed Scopes Ratings. The agency, however, highlights that, at the end of 2024, the production cheap he stood on a level similar to that prior to pandemic In 2019, late compared to the average of the euro area (+5.4%) and other sovereign states with high rating such as Sweden (+6.1%), Netherlands (+8.9%), Switzerland (+8.2%) or Denmark (+15.4%). Scope provided one persistent low GDP growth, 0.2% in 2025, with a strengthening of growth during the second half of the year. GDP is expected to gradually increase with annual growth average of about 1.1% in the next five yearsas large expenditure plans are implemented for defense and infrastructures financed by the debt.
Growing debt
The solid fiscal policy framework of Germany and the solid record of tax discipline they are anchored to “Debt brake” sanctioned by a constitutional law. However, the new Germany led by Friedrich Merz has approved a plan to increase debt of 500 billion Euro in 12 years, with 100 billion euros intended for the Landers and 100 billion at the climate and transition fund. The rating agency also provides for an increase in Defense expenditure up to 3% of GDP By 2027, bringing the debt/GDP ratio from 63% in 2024 to 70% in 2029. Finally, in line with the brake rule for debt for the federal government, The German Lander will be allowed to debt Net annual 0.35% of GDPincreasing compared to the previous 0%. The increase foreseen in the debt emission should increase the relationship debt/GDP about 70% by 2029 from 63% in 2024.
Structural reforms
Despite the solidity of the German tax framework, the increase in public spending must be balanced by reforms to encourage investments private and address the problem of theNGRECTION OF THE POPULATIONunderlined Scope Rings. The priorities include the dossier relating to high energy pricesthe reduction of the bureaucracythe reforms of the labor market To increase participation rates and checks on the‘immigration who do not compromise Germany’s attraction for qualified migrants.
