German research institutes predict weak economic growth in 2025

Research institutes in Germany have presented a grim outlook for the national economy after analyzing the current conditions. Their estimates indicate that the country's GDP is expected to grow by a mere 0.1% this year, following two years of decline. This new forecast is notably lower than the September projection of 0.8%. Looking ahead to 2026, they have maintained their growth expectation at 1.3%.

Torsten Schmidt from the Leibniz Institute for Economic Research pointed out that US protectionist policies and existing geopolitical tensions are having a detrimental effect on Germany's economic prospects. He also noted that the increasing international competition driven by the rapid advancement of Chinese companies adds further challenges for the German business.

Bloomberg has reported that the measures introduced to reduce taxes and bureaucratic hurdles have yet to yield significant results, with any substantial increase in spending planned only for 2026. Additionally, new tariff restrictions from the US pose further risks for Germany's export-driven economy. The research institutes emphasize that the precise impact of these measures remains difficult to predict due to their unprecedented nature.