Germany's economy is facing a challenging year ahead, with the government slashing its 2025 growth forecast to a meager 0.3%. This downward revision reflects the ongoing impact of global economic crises and structural weaknesses within Germany's own system. The country's performance has been sluggish in recent years, with GDP contracting in both 2023 and 2024. The outlook has further been clouded by uncertainty surrounding US economic policy and the outcome of the upcoming German elections.
BERLIN (AP) — The German government on Wednesday slashed its 2025 growth forecast for the country’s economy, Europe’s biggest, to just 0.3%. The new projection is much lower than the government’s previous forecast of 1.1% growth, issued in October. Germany has managed no meaningful economic growth in the past four years as it has struggled to deal with major shifts in the global economy and with structural challenges of its own.
Preliminary figures released two weeks ago showed that gross domestic product contracted by 0.2% last year, following a 0.3% decline in 2023. The economy is one of the top issues in the campaign for an early German parliamentary election on Feb. 23. It is being held seven months before it was originally scheduled after Chancellor Olaf Scholz’s three-party coalition Vice Chancellor Robert Habeck, who is also Germany’s economy minister, said in a statement that “the global crises of recent years have hit our industry- and export-oriented economy particularly hard,” although an energy crunch was headed off after Russia’s full-scale invasion and inflation has fallen. He said it has become increasingly clear that Germany suffers from fundamental structural problems including a shortage of skilled labor, “overflowing bureaucracy and investment weakness, in private as well as public investment.” Habeck pointed to “the currently high uncertainty” about U.S. economic and trade policy and uncertainty about Germany’s own post-election course as a brake on sentiment for investment and consumer
GERMANY ECONOMY GROWTH FORECAST STRUCTURAL PROBLEMS ELECTION GLOBAL CRISES US POLICY
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