Germany's Economic Outlook Dims for 2025

The German government has revised its economic projections for 2025, now expecting stagnation instead of the previously forecasted 0.3% growth. This confirmation comes amid growing concerns over global trade tensions and their impact on Germany's export-driven economy.

Inflation and Growth Projections

According to Economy Minister Robert Habeck, headline inflation is anticipated to decrease to 2% in 2025 and further to 1.9% in 2026. "Inflation-dampening factors are expected to prevail over the remainder of this year," the government stated, offering a glimmer of hope amidst the gloomy economic forecast.

Global Trade Tensions Pose Risks

Habeck also highlighted the potential adverse effects of US trade policies on the German economy. "Given the German economy's close integration into global supply chains and our high level of foreign trade openness, the new US protectionism could have significant direct and indirect effects on our economic growth," he warned. The minister called for the European Union and the US to "find a solution to the tariff conflict" to mitigate these risks.