Germany's Economic Outlook Takes a Turn

In a recent announcement, the German government has revised its economic projections for 2025, now expecting stagnation instead of the previously forecasted 0.3% growth. This confirmation comes amidst growing concerns over global trade tensions and their potential impact on Germany's economy.

Inflation and Growth Projections

According to Economy Minister Robert Habeck, the German GDP is anticipated to grow by around 1% in 2026. Meanwhile, headline inflation is projected to decrease to 2% in 2025 and further to 1.9% in 2026. The government highlighted that "inflation-dampening factors are expected to prevail over the remainder of this year."

Global Trade Tensions: A Concern for Germany

Habeck also expressed concerns over the potential impact of US trade policies on the German economy. He emphasized the country's vulnerability due to its deep integration into global supply chains and high level of foreign trade openness. "The new US protectionism could have significant direct and indirect effects on our economic growth," Habeck warned, calling for a resolution to the ongoing tariff conflict between the European Union and the US.