The German Retail Federation (HDE) has called on the government to prioritise the domestic economy as a key driver of growth amid ongoing global uncertainties. In a letter to Chancellor Friedrich Merz and Economics Minister Katherina Reiche, the association highlighted the impact of geopolitical tensions, trade conflicts, and a weakening world economy on German trade, stressing that domestic policy offers a more immediate and controllable avenue for stabilisation.
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HDE President Alexander von Preen said: "The international crises are enormous. Trade conflicts and wars are having a full impact on trade relations and exports. There is great uncertainty. It is right and important that the German government creates good framework conditions for the domestic economy in this difficult environment. Strong industries will continue to form the backbone of our country. But the domestic economy must not be overlooked. Within Germany and the EU, the government has greater influence than in the international context. At this time, policy must first take care of its own house and ensure that the domestic economy acts as a stabilising anchor and becomes a driver of overall economic growth."
To stimulate domestic demand, the HDE recommends targeted support for low- and middle-income households while rejecting tax increases. Von Preen added: "There is also an urgent need for relief for small and medium-sized enterprises. Reducing bureaucracy, lowering energy costs, and providing investment incentives are central prerequisites for economic growth locally. Therefore, the electricity tax reduction must apply to all."
The HDE also called for targeted government support for the digitalisation of SMEs, underlining that domestic economic growth requires decisive and rapid policy measures. Von Preen emphasised: "The domestic economy is not self-sustaining. But it is easier for the government to influence than the complex international situation. Here, policy must act quickly and decisively. Then we have the chance to effectively stimulate our domestic economy. In the end, everyone would benefit: the companies, the employees, and the overall economy."
As Germany's retail sector is the country's third-largest employer and a central pillar of the domestic economy, the HDE highlighted its readiness to engage constructively with policymakers to drive stability and growth.
More information:
Handelsverband Deutschland
www.einzelhandel.de
