Germany’s economic outlook worsens due to US trade policies — Ifo

The Ifo Institute reported a drop in economic expectations in Germany in April. The Ifo index fell to 87.4 points in April, down from 87.7 in March, reflecting the negative impact of US trade policies. Analysts had expected a decline to 85 points.

According to Clemens Fuest, President of the Ifo Institute, businesses are facing heightened uncertainty as they brace for potential economic turbulence. The Trump administration’s trade policies are putting pressure on the outlook for Europe’s largest economy. The situation has been further complicated by sector-specific tariffs affecting Germany’s automotive industry.

Earlier this week, the International Monetary Fund (IMF) revised its 2025 GDP forecast for Germany, now predicting stagnation instead of the previously anticipated 0.3% economic growth. Meanwhile, Bundesbank President Joachim Nagel warned of a real recession risk, highlighting the damaging effect of US tariffs.

The German government is set to release updated economic forecasts which, according to Handelsblatt, will also project flat GDP growth for next year.