Overview

• Germany's GDP is forecasted to shrink by 0.2% in 2025, marking its third consecutive year of economic decline, driven by US trade tensions, global uncertainties, and high domestic costs.
• Unemployment is expected to reach three million by summer 2025, the highest level since 2010, reflecting broader economic strain.
• The industrial and construction sectors continue to struggle, with further output declines anticipated following significant drops in 2024.
• Bavarian businesses show cautious optimism, with the IHK Schwaben index crossing the growth threshold, though the Weißbier-Index remains stagnant at historically low levels.
• The federal government's €500 billion infrastructure fund is seen as a potential catalyst for recovery, contingent on swift and effective implementation.