Trade tensions and political uncertainty set to stifle Germany’s economic growth in 2025

Posted on April 28, 2025   |  

Germany's economy, the largest in Europe, is expected to stagnate in 2025, impacted by ongoing trade tensions from the US and domestic political uncertainty.

The government has revised its 2025 growth forecast to zero, down from a previous 0.3% estimate made in January.

For 2026, the growth forecast has been slightly lowered to 1%, down from the earlier 1.1% projection.

The country is facing significant economic challenges due to trade disruptions initiated by US President Donald Trump.

Political instability, exacerbated by Germany's lack of a parliamentary majority government since November, is adding to economic uncertainty.

A new administration has yet to be officially established following the February elections, further complicating the situation.