gotchanewsdaily.com 
It is crucial that Germany embarks on a period of economic growth, the country’s finance minister Jörg Kukies told CNBC on Thursday, adding that structural weaknesses must be addressed.
“We’ve just gotten revised down growth forecasts for the IMF again,” Kukies told CNBC’s Karen Tso and Steve Sedgwick at the World Economic forum in Davos.
“The structural weaknesses of our economy absolutely have to be addressed,” he added. “It’s really important that we embark on a path of economic growth.”
Germany’s annual gross domestic product declined in both 2023 and 2024. Quarterly GDP readings have also been muted, but the economy has so far skirted a technical recession.
The International Monetary Fund (IMF) is currently forecasting 0.3% GDP growth in Germany for 2025 and 1.1% for 2026, according to the January update to its World Economic Outlook. It marked a stark downgrade from its October forecast of 0.8% growth in 2025.
‘Targeted reforms’ to debt brake
Kukies also addressed the debate over Germany’s so-called debt brake, a fiscal rule enshrined in the German constitution. The debt brake limits how much debt the government can take on, and dictates that the size of the federal government’s structural budget deficit must not exceed 0.35% of the country’s annual gross domestic product.
The Finance Minister said some “targeted reforms” to the rule were necessary “because we have so much need for infrastructure spend for railways, on roads, on bridges, on education, on 5G, 6G infrastructure etcetera.”
“But the vast majority of investment […] in our country has to come from the private sector,” he added, saying that the right incentives for private investors to “rediscover Germany” were needed.
Kukies said German companies were still doing “very well” when it comes to their global businesses — which is reflected in their share price performance — but were “under stress” domestically.
“So that’s the problem that we have to fix,” he said. “We just need to offer them better conditions to invest and do research and development in Germany.”
Kukies became Germany’s finance minister in November, taking over from Christian Lindner who was sacked by Chancellor Olaf Scholz after months of wrangling and clashes over the economy and budget.
Lindner’s dismissal effectively brought an end to the former German ruling coalition, which was made up of Scholz’ Social Democratic Party, Lindner’s Free Democratic Party and the Green party. This, in turn, saw Germany’s national election moved forward to Feb. 23.
“The election is all about economics,” Kukies added.
Closer trade ties with the U.S.?
In response to repeated threats by President Donald Trump to slap tariffs on imports from the European Union to the U.S., Kukies said communication was key.
“I’ve been active in government under a Trump administration and a Biden administration and we’ve had very close dialogue with the U.S. administration in both cases,” he noted.
The idea of tariffs has been met with widespread concern from European leaders about what they could mean for economies in the region. Germany is seen as particularly vulnerable as trade is a key pillar of the country’s economy; the U.S. is its biggest export trade partner, according to the country’s statistics office Destatis.
Kukies on Thursday said that Germany’s vulnerability to tariffs was “natural” given the economy’s exposure to trade, but suggested that trade relations with the U.S. could become even stronger.
“I do think, and some of the statements that we’ve heard also indicate, that there’s also interest in actually strengthening the trade ties because both the U.S. and Germany have a lot to offer to each other in terms of energy, digital services, machines, cars,” he said.
