Finance
German firms give government poor grades on economic policy, Ifo says
Published by Global Banking & Finance Review®
Posted on February 5, 2026
2 min readLast updated: February 5, 2026
Quick Summary
German companies criticize government economic policy, giving it a poor grade. Key issues include bureaucracy and tax reforms, according to an Ifo survey.
German Businesses Rate Government Economic Policy Poorly, Ifo Reports
Overview of Business Sentiment on Economic Policy
By Maria Martinez
Survey Results and Ratings
BERLIN, Feb 5 (Reuters) - German companies gave the government's economic policy a poor report card, the Ifo Institute said on Thursday, with businesses demanding less bureaucracy and tax reforms as top priorities.
Key Areas of Concern
Firms awarded an average grade of 4.2 for the government's economic policy, a survey by Ifo showed. In Germany's school grading system, 1 is the best and 6 the worst.
Industry-Wide Criticism
“Companies currently see hardly any progress on key economic policy issues,” said Klaus Wohlrabe, head of surveys at Ifo. “The verdict is accordingly negative.”
Social and pension policy received the weakest rating at 4.6, Ifo said.
Companies graded labour market, industrial, energy and climate policy between 4.1 and 4.2, while fiscal policy as well as infrastructure and digitalisation scored slightly better at 4.0.
The criticism was broadly shared across sectors, Ifo said, with average grades in industry and services ranging from 3.8 to 4.5. No sector rated the government's economic policy as "good" on average, and even the best results were only in the "satisfactory" range, shading toward "sufficient", it added.
Asked where policymakers should focus, 40.4% of companies cited cutting bureaucracy and regulation as the top priority, Ifo said.
Tax and duty reforms followed at 37.1%, while 24.6% pointed to the labour market and skilled workers and 23.3% to energy policy.
(Reporting by Maria MartinezEditing by Ludwig Burger)
Key Takeaways
- •German firms rate economic policy poorly, average grade 4.2.
- •Social and pension policy received the weakest rating at 4.6.
- •Bureaucracy and tax reforms are top priorities for businesses.
- •No sector rated the policy as 'good' on average.
- •Ifo survey highlights widespread industry criticism.
Frequently Asked Questions about German firms give government poor grades on economic policy, Ifo says
1What are tax reforms?
Tax reforms are changes made to the tax system, which may include adjustments to tax rates, tax structures, or the introduction of new taxes to improve economic efficiency and fairness.
2What is the labour market?
The labour market is the supply and demand for labor, where employers seek to hire workers and individuals seek employment, influencing wage levels and job availability.
3What is bureaucracy?
Bureaucracy refers to the administrative system governing any large institution, characterized by standardized procedures and rules, which can sometimes lead to inefficiencies.
