German economy avoids recession as unemployment rises to ten-year high

The German economy grew in the first quarter of 2025, avoiding a recession. However, the country's unemployment rate reached a ten-year high.

According to preliminary data from the Federal Statistical Office, the country's GDP climbed 0.2% in the first three months of the year compared to the previous quarter. Meanwhile, the seasonally adjusted number of unemployed people increased by 4,000, reaching 2.92 million. This is the first time in 10 years that the number of jobless people in Germany has approached the 3 million mark. The seasonally adjusted unemployment rate climbed to 6.3%, up from 6.2% the previous month.

Experts polled by Reuters said that rising consumption is key to preventing further deterioration of Germany's economic situation. However, two years of recession and a steady flow of worrying news do not contribute to improving consumer sentiment in the country, analysts at Hamburg Commercial Bank say.

For example, retail sales data for March showed a 0.2% decline. Additionally, Reuters emphasizes that the increase in import prices indicates a possible future rise in inflation.