Overview

• The German economy is expected to shrink by 0.2% in 2024, with only 0.2% growth forecasted for 2025, marking two years of stagnation.
• Exports have fallen sharply, including a 14% drop in shipments to the U.S., Germany's largest export market, raising concerns over global trade tensions under the incoming Trump administration.
• Unemployment is projected to rise to 6.3% in 2025, with many firms planning significant layoffs, particularly in the automotive and manufacturing sectors.
• Structural issues, including high energy costs, excessive bureaucracy, and declining industrial competitiveness, are seen as major obstacles to recovery.
• Economic recovery is not anticipated until 2026, with modest growth expected as structural reforms and global trade adjustments remain uncertain.