Overview

• Kiel’s IfW lowered its autumn forecast to 0.1% GDP growth for 2025, down from 0.3% projected in June.
• Munich’s Ifo now sees 0.2% growth this year and expects about 155,000 more unemployed, pushing the jobless rate to roughly 6.3%.
• Both institutes describe a prolonged weak patch after contractions in 2023 and 2024, with U.S. tariffs and a frail industry curbing exports and output.
• IfW estimates expansive fiscal policy could add around 0.6 percentage points to growth next year as new budget space is deployed.
• Medium-term projections point to only a modest pickup, with Ifo trimming 2026 growth to 1.3% and IfW seeing unemployment easing to about 5.8% by 2027.