German Economic Growth Forecast Slashed to 0.2% for 2025

Trade conflicts, weak consumption, and global uncertainties weigh heavily on Germany's economic outlook, with recovery not expected until 2026.

The Ifo Institute has cut its 2025 growth forecast for Germany to 0.2%, down from its earlier prediction of 0.4%.
The OECD has similarly revised its 2025 growth projection for Germany to 0.4%, placing it among the weakest performers in the G20, ahead of only Mexico.
Trade tensions, driven by U.S. protectionist policies and retaliatory tariffs, are cited as major factors impacting global and German economic performance.
Potential recovery hinges on the implementation of planned government investments in infrastructure and defense, which could significantly boost growth in 2026.
Experts warn that inflation in Germany may reach 2.4% in 2025, driven by rising service costs and wage pressures.