Economic climate 2025: positive signals vs. geopolitical risks

If you look at the studies on the economic climate in Germany, they are linked to high expectations of governments. There are many demands on politicians, only some of which can certainly be met. In addition, some politicians themselves run the risk of constantly making new demands and requests to cover up real or perceived deficits or shortcomings in individual areas. Regulation through market mechanisms often takes a back seat.

First positive signals

There are now initial positive signs that must be utilised to create planning certainty for economic players and thus also promote investment by the economy. Simply plugging recognised gaps, on the other hand, will lead to fragmentation and no lasting recovery. The issues of energy (prices), dilapidated infrastructure, subsidies for housing construction and support for the application-related development and expansion of new technologies are particularly important here. Defence investments will also have a positive effect if purchases are made in Europe - which will also benefit suppliers - and not just in the USA or Asia. Experience shows that the dismantling of regulation as another important goal, on the other hand, takes much longer, certainly also because parts of the ministerial bureaucracy make themselves superfluous. We will see that it will take time for these measures to take effect. Until then and afterwards, companies with liquidity bottlenecks will continue to have a difficult time.

In international business, on the other hand, the increasing geopolitical risks must be taken into account. Recent developments have also increased the threat of terrorism. Political risks therefore play a greater role in the overall assessment. Overall higher risks, supplier or customer cancellations, changes in supply and logistics relationships and even drastic price changes may result. For example, a blockade of the Strait of Hormuz would hit Europe hard in terms of logistics costs. We can only hope that the situation there will ease again in the short term. Aviation is also significantly restricted. Major international investments, e.g. in the Middle East, will also be jeopardised to some extent, or at least delayed. There is also the question of how international sanctions lists will develop. This creates additional uncertainties. This is associated with new framework conditions that need to be taken into account when assessing customers and suppliers. Current developments can also have a direct influence on the assessment. It is therefore important to monitor the portfolio of affected business partners as closely as possible. Risk-orientated classifications of customers and suppliers, which show the areas in which business partners could be affected, can help here.