Germany's Economic Outlook Dims for 2025

The German government has officially confirmed that the economy is expected to stagnate in 2025, revising down previous growth projections of 0.3%. This announcement, made during the spring economic projections, aligns with earlier media reports. Economy Minister Robert Habeck also shared that a modest growth of around 1% is anticipated for 2026.

Inflation and Global Trade Concerns

Inflation rates are projected to decrease to 2% in 2025 and further to 1.9% in 2026, with the government citing "inflation-dampening factors" as the primary reason for this trend. However, Habeck expressed concerns over the potential impact of US trade policies on Germany's economy. Highlighting the country's deep integration into global supply chains and its openness to foreign trade, he warned of the significant effects that new US protectionism could have on economic growth. Habeck called for a resolution to the ongoing tariff conflict between the European Union and the US.