Ifo: Germany's economy to be held back by labor shortages and energy transition

Germany's economic growth will be held back in the long term by labor shortages and the shift to greener energy, known as the Energiewende. This was said by Clemens Fuest, president of the Munich-based Ifo Institute for Economic Research, according to the DPA news agency. Germany is Europe's largest economy and the Czech Republic's biggest trading partner.

„Economic growth in Germany will be weaker in the future,“ Fuest said.

He pointed to demographic trends that will lead to a decline in the available workforce. He also warned of the negative economic effects of the energy transition, which politicians are underestimating, in his view.

„Reducing Germany's electricity supply was a mistake,“ Fuest said.

As part of its energy transition, Germany has, among other things, shut down its nuclear power plants, DPA reports.

Recently, chemical companies have warned that high energy costs will force them to move some production from Germany abroad. „Plans by chemical companies to relocate production need to be taken seriously,“ Fuest said.