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Germany's aging population presents another challenge, yet it is not insurmountable. The decline in the working-age population could be tempered by strategic immigration policies, a lesson from past demographic shifts in the country. Although there is currently little appetite for increased immigration, future labor shortages may prompt a reevaluation of these policies, enabling Germany to sustain its economic productivity.
Temporary Setbacks in Manufacturing
Germany's economy is particularly sensitive to global manufacturing trends, which have recently faced setbacks post-pandemic. The current downturn is significant but is expected to be temporary. Once global manufacturing rebounds, Germany, with its strong manufacturing base, will likely see a resurgence as well.