The forecast of the growth of the German economy has been significantly reduced. Economy Minister Robert Habeck said that the government expected an increase of 0.3 percent in 2025. In autumn, the outgoing coalition predicted 1.1 percent.
In its previous forecast for this year the government German He expected the positive effects of “initiative for growth” – reminded the DPA agency.
Dark clouds over the largest economy of Europe
Planned, among others incentives for investments and financial support of the government for the lower electricity prices. However, after the collapse of the Government Coalition of Social Democrats (SPD), Green and liberals (FDP) In November, these initiatives were not implemented.
The economic report on 2025 stated that foreign trade risk increased. The German government is also expecting slight decrease in exports.
Greater increase in the German economy – at 1.1 percent – It is expected in 2026. However, in autumn 2024 the government forecast was 1.6 percent.
Possible increase in unemployment
The government is expecting an average annual foot inflation at 2.2 percent This is in line with the goal of the European Central Bank of 2 percent. – DPA reminded. The economic slowdown will also be more and more felt on the labor market. Last year, the number of bankruptcies among companies increased.
The German government expects that The number of unemployed will also increase.
In 2024, the German economy shrunk by 0.2 percent. And it was the second year in a row when there was a decline GDP. In 2023, the German economy shrunk by 0.3 percent.
He announced “Handelsblatt” about the planned reduction of the government's economic growth forecast for 2025.
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