Germany Lowers Growth Projections for 2025

By Ludwig Burger

The German government has reduced its growth forecast for 2025 to 0.3% from 1.1%, according to the newspaper Handelsblatt, citing government sources. The economy continues to show little sign of recovering from two years of contraction.

The Economy Ministry declined to comment on this matter.

In the previous year, Germany’s economy contracted for the second straight year, weighed down by competition from abroad, high energy costs, elevated interest rates, and uncertain business outlooks. Official statistics revealed that the German economy, the largest in Europe, shrank by 0.2% over the full year.

Disagreements on strategies to rejuvenate the economy were a significant factor leading to the collapse of Chancellor Olaf Scholz’s fractious three-party coalition last year. Economic issues are the primary concern for German voters ahead of the national election scheduled for February 23.

The earlier prediction of 1.1% growth made by the Economy Ministry, led by Deputy Chancellor Robert Habeck of the Green Party, was already under scrutiny. In December, Germany’s three leading economic forecasters estimated growth rates between 0 and 0.4% for 2025, without swift and strong structural measures.

Additionally, Handelsblatt reported that the government has also downgraded its 2026 growth forecast to just over 1% from 1.6%.