Investment shortfalls in the German economy resulting from crises have significantly increased since the beginning of 2020, currently totaling 420 billion euros, according to a new calculation by the Institute of the German Economy (IW). The study indicates that public investments have been insufficient to offset the deficit incurred by companies.
To arrive at these figures, the IW compared actual gross fixed capital formation-covering the period from the first quarter of 2020 to the second quarter of 2026-against a projected trajectory that excluded the impact of the pandemic, geopolitical crises, and structural problems in Germany.
The analysis revealed that companies invested approximately 470 billion euros less than historical trends would have indicated. Meanwhile, government spending increased by about 50 billion euros. Even by 2026, private investments have not yet reached the pre-pandemic level, though public investments have been 20 percent higher than they were in 2019.
