The German economy is expected to experience stagnation in 2025 instead of 0.3% growth previously projected, the country's government said in its spring economic projections on Thursday, confirming media reports. German gross domestic product (GDP) is expected to grow around 1% in 2026, according to Habeck.
Headline inflation is projected to fall to 2% in 2025 and to 1.9% in 2026. "Inflation-dampening factors are expected to prevail over the remainder of this year," the government said.
German Economy Minister Robert Habeck warned that the national economy is likely to be impacted by US trade policies. "Given the German economy's close integration into global supply chains and our high level of foreign trade openness, the new US protectionism could have significant direct and indirect effects on our economic growth," he pointed out, urging the European Union and the US to "find a solution to the tariff conflict."
