The German Council of Economic Experts, a group of government advisers, has said that unpredictable U.S. trade policies and sharply rising import tariffs are weighing on Europe’s largest economy, which has relied on the export sector for decades for growth. Trump suspended the increase in tariffs on EU exports until the beginning of July, as it would pose an additional risk to the German economy. The German economy is still clearly in recession and has benefited little from global GDP growth recently. German economists predict that Germany will stagnate this year. At the same time, GDP growth of 0.4% was predicted in November. Growth is now expected to be just 1% by 2026.
Earlier, the European Commission lowered its forecasts for the German economy and also expected stagnation, although it had previously forecast growth of 0.7%. Thus, in 2025, Germany’s GDP will remain without growth for the third year in a row, which has never been seen before. In fact, Bundesbank President Joachim Nagel warned that another recession is possible – as in 2023 and 2024.
Translated and edited by Hans Seckler