Germany expects economic stagnation in 2025 due to trade conflicts

The German government has revised its economic forecast for 2025, expecting stagnation instead of the previous 0.3% growth. This is due to increasing uncertainty due to global trade conflicts, which are expected to negatively affect growth and investment activity. 

Economy Minister Robert Habek provided updated data, stressing the need to find a trade compromise between Europe and the United States, but at the same time said that the EU should be ready to retaliate if necessary.

Habeck noted that the German economy is facing serious challenges against the backdrop of the unpredictable US trade policy. He expressed concern about the possible consequences of Washington's new protectionism for Germany, given the country's deep integration into global production and trade chains. This can lead to significant direct and indirect risks to economic growth.

The forecast for 2026 has also been adjusted: growth is now expected to be 1% instead of 1.1%. This change reflects cautious expectations regarding the economic recovery under the future government of Chancellor Friedrich Merz.