Historic Economic Stagnation Looms for Germany

The outgoing German government has revised its economic forecast for 2025, predicting a stagnation that would mark the first time in history the German economy fails to grow for three consecutive years. Initially, a modest growth of 0.3% was anticipated in January.

Revised Growth Forecasts for 2026

Looking ahead to 2026, the government has adjusted its GDP growth expectations to approximately 1%, a slight decrease of 0.1 percentage points from previous estimates.

Impact of U.S. Trade Policies

The downward revision is largely attributed to the unpredictable trade policies and tariffs imposed by United States President Donald Trump. These measures have created a climate of uncertainty, leading German companies to delay investment decisions.