1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites
In focus
Donald TrumpMiddle East crisisDR Congo
Latest audioLatest videos
Live TV
BusinessGermany

Germany: 2025 economic growth forecast lowered

January 29, 2025

Berlin brought down its 2025 economic growth forecast from 1.1% to 0.3%. A government report cited the collapse of the government as the main reason.

https://p.dw.com/p/4pmbv
A person holds a purse, wallet, with cash in his hands
Despite the forecast, surveyed Germans said they do not expect their own financial circumstances to changeImage: K. Schmitt/Fotostand/IMAGO

The German government announced on Wednesday an economic growth forecast of 0.3% for the year 2025, down from the 1.1% projected last October.

The shrunk growth projections come amid the return of US President Donald Trump to the White House and the upcoming federal elections next year.

Why did the forecast change?

A report by the Economy Ministry expected Germany's poor economic performance to extend to this year as well, following two years of recession.

"Germany is stuck in stagnation," Economy Minister Robert Habeck told a press conference in Berlin.

The report said the revision of the growth forecast was "mainly due" to the collapse of the government last November, which led to a disruption in measures intended to encourage growth.

Chancellor Olaf Scholz's coalition government collapsed in November, after his Social Democrats (SPD) and the Greens fell out with their coalition partner, the neoliberal Free Democratic Party (FDP), over budget disagreements.

What do young Germans think about the government crisis?

While Europe's biggest economy awaits anew government following the February 23 elections, the country's future economic policy remains uncertain.

The report also said the downgrade was due to the "significantly" increased risks to trade, amid the return of US President Donald Trump to the White House, and the potential changes to US policy he could introduce.

Meanwhile, a survey conducted by fund provider Union Investment found that 53% of the respondents expected their own financial situation to remain stable in the next 12 months, while 30% even believed it would improve.

rmt/jcg (AFP, dpa)