German government lowers 2025 economic forecast to zero growth

Berlin (dpa) – The German government on Thursday slashed its 2025 economic forecast to zero growth, predicting yet another difficult year for Europe’s biggest economy.

It comes after Berlin still predicted gross domestic product (GDP) to grow by 0.3 percent this year back in January, but the outgoing centre-left administration now believes that the economy will stagnate this year, Economy Minister Robert Habeck said in Berlin.

This means there is little hope for relief following two years of recession in 2023 and 2024.

January’s outlook was already downgraded from the 1.1 percent GDP growth forecast in October last year.

Germany’s economy has been mired in an economic crisis in recent years, with inflation soaring in response to the coronavirus pandemic and the Russian invasion of Ukraine.

Key export-based industries such as carmaking and pharmaceuticals in the European Union are set to be hit hard by US tariffs, with a blanket 10 percent duty on all imports to the US and 25 percent levies on cars, aluminium and steel already in force.

Industry representatives have repeatedly pointed to a shortage of workers, long planning and approval procedures and high energy costs by international comparison as the main factors hampering German economic growth.

Weak economic growth in Germany adversely affects the outlook for the rest of the bloc. (24. April)