If the current course of the German government does not change, the country may face long-term economic stagnation.

Axar.az reports that this was stated by Clemens Fuest, head of the Ifo Institute for Economic Research in Munich.

“Politicians are not addressing the problems of the private sector; in fact, they are making them worse. In the medium term, taxes and levies will rise, because otherwise, for example, pension increases will no longer be financed. This will lead to a further decline in investment and increased capital outflows from Germany. As a result, Germany could enter a prolonged period of stagnation. There is no guarantee of a return to growth,” Fuest said in an interview with Süddeutsche Zeitung.

He believes that Merz has so far avoided discussing the key challenges in economic policy.