 "Germany")
Germany's DIHK chambers of industry and commerce expect Europe's largest economy to shrink by 0.5% this year as high energy prices, heavy bureaucracy, a skilled workers shortage and weak domestic demand weigh on economic output.
A DIHK poll of more than 27,000 companies showed that of those surveyed, 35% expect business to deteriorate in the next 12 months with only 14% expecting an improvement.
"The bad mood among companies is becoming more entrenched,†said the DIHK in Berlin on Thursday, adding that it would be only the second time in Germany's post-war history where the economy contracted for two years in row. The first case was in 2002 and 2003.
"The is a clear alarm signal that Germany and Europe must take seriously," DIHK head Martin Wansleben said in a statement.
The government next week will publish its economic growth forecast for this year. A source with knowledge of the matter said Berlin will slash its growth forecast to just 0.2%, although still a much more optimistic view than the DIHK's.
Three out of five companies see the country's economic policy as a business risk, the survey showed, adding that 33% of firms plan to reduce investments in Germany in the next 12 month, while 24% said they planned expansion.
Germany's ruling coalition wants to present proposals for strengthening Germany as a business location by spring, with experts saying this could include tax reform and reducing bureaucracy.
