Germany's Economic Outlook for 2025

Joachim Nagel, a key figure on the European Central Bank (ECB) Governing Council and President of the Bundesbank, has raised concerns about Germany's economic future. Speaking on Wednesday, Nagel did not rule out the possibility of Germany entering a recession in 2025. However, he remained optimistic about the country's economic recovery, stating, "Germany will do much better in the coming years."

Fiscal Stimulus and Inflation Concerns

In his interview with Bloomberg, Nagel commended the German government's fiscal stimulus measures introduced this year. He described these actions as sending "an important message" that Germany "is doing its homework." Nagel reassured that these measures would not lead to an increase in the Eurozone's inflation, confidently predicting that the ECB's key interest rate would hit its 2% target by 2025.

Global Economic Policies and the Eurozone

Nagel also touched upon global economic challenges, specifically addressing former United States President Donald Trump's tariff policies. He emphasized the need for the Eurozone to develop a "better understanding" of how to respond to such policies. Additionally, Nagel cautioned against undermining the credibility of the US Treasury and the dollar's status as safe havens, labeling such doubts as "not good."