Germany’s Council of Economic Experts has delivered a sobering assessment in its spring forecast, projecting zero economic growth for 2025 – a significant downgrade from last autumn’s 0.4% growth expectation. This marks what could become Germany’s third consecutive year without economic expansion, following recessions in both 2023 and 2024.
Persistent Economic Weakness
The report identifies Germany as remaining in a “clearly weak phase,” with only modest 1.0% growth anticipated for 2026. The five-member expert committee, known as the “Five Wise Men,” highlights substantial uncertainty about Germany’s medium-term economic prospects, citing bureaucratic hurdles and unpredictable U.S. tariff policies under President Trump as major drags on the export-driven economy.
Structural Shifts and Policy Responses
Accelerating structural transformation threatens traditionally strong industries and regions. While the new federal government’s massive fiscal stimulus package offers hope, experts emphasize that its effectiveness depends heavily on allocation – with public investments offering the strongest long-term growth potential, though likely not bearing fruit before 2026.
Labor Market and Inflation Outlook
The economic slump is expected to push unemployment to 6.2% in 2025. Inflation projections show modest easing to 2.1% (2025) and 2.0% (2026), though experts caution about potential volatility from global trade tensions and domestic stimulus-fueled demand pressures. As the government’s premier economic advisory body, these forecasts will significantly inform German policymaking during this challenging period.
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