At the lower level of 10 years foreign investment in Germany

Foreigners invested less in last year (2023) than in ten years according to a new study by the Institute of German Economy (IW). German companies also prefer to expand to the EU, according to the same investigation. Foreign companies invested only about EUR 22 billion in Germany in 2023 – the lowest level in the last ten years. Overall, net outflows last year amounted to EUR 94 billion. The price shows the difference between investments by German companies abroad and foreign companies in Germany. Only in the previous two years, 2021 (100 billion euros) and 2022 (125 billion euros), had more money flowed from Germany. Repeated high net outputs indicate that these are not extraordinary phenomena, but the first symptoms of deindustrialization. In fact, production was in the production sector. Although direct investment is currently declining worldwide, this is not for the EU. In the first nine months of 2023, EU inputs increased by 120% – including Germany: Around EUR 90 billion, i.e. around 2/3 of all foreign investment from German companies, recently flowed into the EU Member States, particularly the Netherlands, Belgium and France. Within Germany’s borders, on the other hand, foreign companies hardly invested at all. And when they did, they were often smaller acquisitions or projects – an indication of adverse location conditions in global competition. “Politicians make it far from attractive for companies to invest in Germany,” says IW economist Christian Ruse (Christian Rusche). This includes the fact that subsidy programmes stop repeatedly and almost overnight. Politicians must drastically improve investment conditions: “If the political framework remains as it is, deindustrialization could be rapidly accelerated,” Rusche said.