The German economy is facing a profound crisis influenced by cyclical and structural factors. The joint economic forecast for spring 2025 predicts a mere 0.1 percent growth in the gross domestic product, equating to stagnation and downgraded by 0.7 percentage points compared to fall 2024. Particularly, the US tariff policy is putting strain on the export-oriented German economy. These protectionist measures by the US could significantly weaken economic momentum in the summer half of 2025, as highlighted by acting Economy Minister Robert Habeck in his spring projection for 2025. Additionally, domestic political uncertainties caused by the change in government and structural weaknesses, such as competitive pressure from China, exacerbate the crisis. The German government has reformed the fiscal constitution to create new debt allowances for investments in defense, climate protection, and infrastructure. However, whether these measures will be sufficient to lift the economy out of stagnation remains uncertain. The current situation is being closely monitored in the media, particularly with daily updates from the Tagesschau.
29.04.2025