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OECD Holds Germany’s 2025 Growth Forecast at 0.4%, Sees Uptick to 1.2% in 2026

High energy costs, trade tensions, weak consumer spending have kept growth subdued; government investment initiatives, rising consumption promise a modest rebound next year

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Ein Werftarbeiter schleift den Kiel eines Schiffs
Ein Mitarbeiter geht an einer Abfüllanlage in der Produktion eines Maschinenbauunternehmens vorbei.

Overview

  • The OECD’s June outlook maintains Germany’s GDP growth at 0.4% for 2025, placing it near the bottom among over 50 advanced economies
  • Analysts predict a slight acceleration to 1.2% growth in 2026, up from an earlier projection of 1.1%
  • Persistent headwinds include high energy prices, escalating trade barriers and cautious household spending
  • Authorities’ planned investment offensive and a normalization of inflation are cited as key factors in boosting consumer demand next year
  • The forecast remains subject to significant risk, as the trajectory could shift markedly with changes in global trade conflict dynamics