Germany’s economy faces significant challenges as low water levels in major rivers disrupt shipping and threaten to stifle growth. Experts warn that prolonged restrictions on inland shipping could lead to a substantial decline in GDP.

The current low water levels in German rivers, particularly the Rhine, Elbe, and Danube, are causing serious economic repercussions. According to forecasts, the Institute of the German Economy predicts a potential reduction of 0.4 percentage points in economic growth this year, which could completely negate the already modest growth projections of around 0.5 percent.

Economists are sounding alarms about the impact of these conditions on industries reliant on bulk transport. With ships unable to carry full loads due to the shallow waters, transport costs are rising, placing additional strain on sectors such as steel and chemicals that depend heavily on waterway logistics. The situation is exacerbated by ongoing heat and drought, which have led to record low water levels, even surpassing the lows experienced in 2018.

As forecasts indicate that river levels may continue to drop without any immediate rain in sight, the economic outlook remains grim. Experts estimate that the production slowdown could result in a loss of one to two billion euros in the third quarter alone. The potential for a significant downturn in GDP highlights the urgent need for measures to address the ongoing drought and its effects on the economy.