A survey by the Association of German Chambers of Industry and Commerce (DIHK) has found that German firms operating abroad are significantly more optimistic about business conditions than those at home. Only 15% of domestic companies expect an improvement, compared with 44% of international branches reporting strong growth prospects.

The data underscores a growing divide within Europe’s largest economy. Firms based in Germany are struggling with sluggish consumer demand, rising production costs, and weak investment sentiment. In contrast, their foreign operations are benefiting from expanding global markets and a weaker euro that boosts export competitiveness.

Economists say this divergence highlights the country’s dependence on exports and the urgent need to stimulate domestic consumption. Without stronger local demand, Germany risks falling behind its European peers in post-pandemic recovery.

The report also reflects a shift in strategy for many companies, which are investing more in their foreign subsidiaries to capture emerging-market growth. This could lead to reduced reinvestment in Germany itself, further weighing on the domestic economy.

In summary, while German firms remain global leaders, their confidence gap reveals structural issues at home. Analysts believe Berlin may need new policies to revive household spending and restore balance between external and internal growth.

Source: Reuters.