Germany’s economy contracted for a second straight year in 2024, underlining the scale of the challenge that will face a new government after elections due in February, including the possibility of fresh tariffs on its exports to the U.

Gross domestic product in the eurozone’s largest economy declined 0.2 percent last year, according to preliminary figures from federal statistics agency Destatis, coming after a 0.3 percent contraction in 2023.

Simply sign up to the German economy myFT Digest -- delivered directly to your inbox. Germany’s economy shrank for a second straight year in 2024, underlining the severity of the downturn facing Europe’s manufacturing powerhouse.

The Federal Statistical Office said that gross domestic product contracted by 0.2% last year following a decline in 2023. Chancellor Olaf Scholz's three-party coalition government collapsed in November when Scholz fired his finance minister in a dispute over how to revitalize the economy.

The German economy contracted by 0.2% in 2024, in the second consecutive year of declines in the annual gross domestic product of Europe's largest economy.