In the first quarter of 2025, the German economy experienced slight growth of 0.2 percent compared to the previous quarter. This growth, which was adjusted for price, seasonality, and calendar effects, was lower than the 0.4 percent predicted by some forecasts, but still represents a positive development after a decline of -0.2% in the fourth quarter of 2024.
Factors Influencing Growth
The Federal Statistical Office reports that both private consumption expenditures and investments were higher in the first quarter compared to the previous quarter, contributing to the slight economic growth. However, in comparison to the same period of the previous year, the gross domestic product (GDP) fell by 0.4 percent adjusted for price, indicating an overall difficult economic situation.
Avoiding a Technical Recession
Thanks to the slight growth, a technical recession, defined as two consecutive quarters of negative growth, was narrowly avoided. Economic prospects remain tense, influenced by global uncertainties such as the tariff dispute between the USA and Europe as well as other geopolitical factors.
The overall economic situation remains challenging. According to forecasts from the ifo Institute, the projected growth for the entire year 2025 is about 0.2 percent, which means Germany may avoid a recession.
- The GDP growth in the first quarter of 2025 was +0.2% compared to the previous quarter.
- After a decline at the end of 2024, this growth provides a slight but positive impulse.
- Forecasts for 2025 continue to expect moderate growth despite existing economic challenges.