German Economy Faces Stagnation

The German government has officially confirmed expectations of economic stagnation in 2025, revising down previous growth forecasts from 0.3% to zero growth. This adjustment was highlighted in the spring economic projections, aligning with earlier media reports.

Looking Ahead to 2026

Despite the bleak outlook for 2025, Economy Minister Robert Habeck projects a modest recovery, with GDP growth anticipated to reach around 1% in 2026. This glimmer of hope is coupled with expectations of inflation easing to 2% in 2025 and further to 1.9% in 2026.

Global Trade Tensions Loom

Habeck also voiced concerns over the potential impact of US trade policies on Germany's economy. Emphasizing Germany's deep integration into global supply chains and its reliance on foreign trade, he warned of the significant effects new US protectionism could have. Habeck called for a resolution to the tariff conflict between the European Union and the US to mitigate these risks.