Germany’s Chamber of Industry and Commerce (DIHK) does not foresee a rapid recovery of the German economy as it struggles to create growth, and called on the new government to make reforms.

“The economic upturn that we all want and that our country needs is not yet in sight,” said DIHK chief executive Helena Melnikov in Berlin on Tuesday.

Fears are growing that, for the first time in Germany’s post-war history, economic output will decline for the third year in a row.

The DIHK continues to expect a decline in gross domestic product (GDP) of 0.3% for the current year. This makes the organization more pessimistic than the German government, which expects GDP to stagnate in 2025.

Melnikov referred to the results of a new DIHK economic survey of more than 23,000 companies which found that the mood remained predominantly poor.

Only a quarter of companies rated their situation as good, and business expectations remained pessimistic.

According to the survey, companies see the economic policy framework, weak domestic demand, high labour costs, rising social security contributions and high energy and raw material prices as the greatest risks to their bottom line.

Added to this is the unpredictable US tariff policy.

Melnikov said comprehensive structural reforms, such as faster planning and approval procedures, are necessary to ensure that the planned debt-financed government fund of €500 billion ($570 billion) for investment in infrastructure and climate change measures can have full effect.

The new German government has announced a comprehensive package of measures to be implemented before the summer recess to ease the burden on companies. These include a reduction in electricity tax and better depreciation conditions to stimulate investment.