Steady as she goes: German economy predicted to tread water for 2025
Economic progress expectation downsized by federal authorities to zilch
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It's a grim forecast for the German economy - the government predicts no growth in 2025.
In a stark reversal from its spring projection, the Federal Ministry of Economics now warns of stagnation. As little as 0.3% growth was initially predicted - a dramatic downturn from the projected 1.1%.
A key factor behind this dismal outlook? Crackdowns on global trade by the US. U.S. tariffs, particularly the 25% levied on car imports, have created a significant obstacle, threatening to shave off up to 0.1% from German GDP in both 2025 and 2026[1][2][3].
And it's not just trade troubles causing the German economy to falter. Continued political instability within Germany - with no government in place since early November [3] - coupled with ever-strengthening competition from countries like China [3], have combined to stifle economic growth.
Contrast this with earlier projections, which had pointed towards modest growth[3]. In 2026, the German government expects a slight rebound, with estimated growth of 1%[1][3].
[1] ntv.de, AFP
[2] Time, "The Long-Term Effects of Trump's Tariffs on Germany"
[3] The Local, "Germany's Export-Dependent Economy Jerks to a Halt as Tariffs and Trade Wars Loom"
The community policy should address the potential impacts of economic stagnation on employment, considering the forecasted no growth of the German economy for 2025. The employment policy should consider this stagnation, not only in the current year but also in the following year, 2026, as the economy is predicted to experience a slight rebound with growth of 1%. The federal government should consider implementing measures to mitigate factors contributing to the economic downturn, such as the impact of US tariffs on car imports. Companies in the finance and business sectors may need to review their own employment policies in anticipation of these economic trends. To stay informed about these developments, consider following news updates on platforms like Whatsapp, Facebook, or Twitter.