Can Germany’s economic recovery outrun the AfD?
Germany is showing early signs of economic recovery just as Chancellor Friedrich Merz’s CDU suffered a major setback from the AfD in Saxony-Anhalt. GDP growth, upgraded forecasts, stronger foreign investment and exports, rising factory orders, and a surge in startup and venture activity point to renewed momentum. The article also highlights technology-linked activity, including AI startups, robotics and space launches, alongside severe restructuring at Volkswagen and other old industries. Economists caution that the recovery is “borrowed” from exports and debt-funded government spending, while private investment, competitiveness, demographics and energy costs remain problems. The political result may make the reforms needed to sustain the recovery more difficult, even as business leaders say they are increasingly vital.
Why it matters
Germany’s startup and venture rebound, especially the 88% rise in new companies and 44% rise in VC investment, is directly relevant to Dealroom’s tracking of emerging ecosystems. The contrast between AI, robotics and space growth and contraction in autos and chemicals offers a useful lens on sector reallocation and competitiveness for Yoram Wijngaarde and Dealroom readers. The article also underscores why granular data on founders, capital and regional ecosystems matters when headline GDP recovery masks uneven structural change.
