American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Latest News

Germany cuts GDP forecast to just 0.3% for 2025: ‘The diagnosis is serious’

by admin January 30, 2025
January 30, 2025
Germany cuts GDP forecast to just 0.3% for 2025: ‘The diagnosis is serious’

Germany’s government announced on Wednesday that it has revised its economic growth forecast for 2025 down to just 0.3%, citing serious concerns over the country’s economic outlook.

Robert Habeck, the country’s economy and climate minister, stressed the gravity of the situation during a press conference, stating,

The diagnosis is serious.

Although he pointed to some positive signs, such as growing demand for credit, Habeck highlighted that “Germany is stuck in stagnation,” signaling a broader economic struggle.

The latest forecast marks a significant reduction from the 1.1% growth prediction made in October.

It aligns closely with forecasts from major financial institutions, including the International Monetary Fund (IMF), which also downgraded its outlook earlier this month, projecting just 0.3% growth for Germany in 2025.

The Bundesbank, Germany’s central bank, had similarly lowered its GDP estimate to 0.2% growth for the same period.

On the other hand, the German Industry Association (DIHK) has taken a more pessimistic view, forecasting a contraction of 0.1% in 2025, which would represent the third consecutive year of negative growth for the country.

Earlier this month, annual GDP data revealed a 0.2% contraction in Germany’s economy for 2024, following a 0.3% decline in 2023.

Although quarterly GDP figures have been sluggish, the country has so far avoided a technical recession, which is defined as two consecutive quarters of economic decline.

Reasons behind Germany’s downturn

Habeck outlined several factors contributing to the downward revision, including the inability of the current government to fully implement its growth initiatives due to the early end of its term.

He also cited uncertainties related to the upcoming federal election, along with geopolitical risks, particularly regarding the potential re-emergence of US tariffs under President Donald Trump’s return to the White House.

The German Ministry for the Economy and Climate stated in a report that while the domestic economy will likely show weak growth in the short term, there is potential for recovery as inflation decreases, real incomes rise, and the economic direction becomes clearer.

The government forecasts that economic conditions will improve in the second half of 2025, with a projected 1.1% growth rate for 2026.

Germany’s upcoming federal election

Germany’s federal election, scheduled for February 23, follows the breakdown of the ruling coalition in November.

The election’s timing has raised further uncertainty about the country’s economic trajectory.

Habeck and Finance Minister Jörg Kukies have both pointed to structural challenges facing the German economy, including labor shortages, excessive bureaucracy, and underinvestment.

The finance minister emphasized that restrictive fiscal policies have hindered growth, adding that Germany has been systematically underinvesting in critical sectors.

The government’s fourth-quarter GDP data is expected to be released on Thursday, with preliminary estimates suggesting a 0.1% decline in the final quarter of 2024.

Meanwhile, inflation is projected to average 2.2% in 2025, following a brief dip below the European Central Bank’s 2% target last summer.

The post Germany cuts GDP forecast to just 0.3% for 2025: ‘The diagnosis is serious’ appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
EU plans new Russia sanctions, targeting aluminum and gaming consoles
next post
Bank of Canada expected to cut interest rates again: here’s why

Related Posts

Blinken meets China’s top diplomat in Laos as...

July 27, 2024

Onwards and upwards?

February 22, 2025

UK economy stagnates as revised GDP figures show...

December 23, 2024

Canada’s gold heist: Inside one of the biggest...

April 22, 2024

Russia orders more evacuations as Ukraine’s incursion into...

August 12, 2024

She was told she wouldn’t live past her...

August 10, 2024

South Africa’s ANC kicks former president Jacob Zuma...

July 30, 2024

War in Gaza could last another seven months,...

May 31, 2024

US Ambassador to Japan to skip Nagasaki peace...

August 8, 2024

What would happen to the US economy if...

April 21, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,763)
    • Investing (2,783)
    • Latest News (2,048)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved