German economic council expects stagnation in 2025

The German Council of Economic Experts, which advises the country’s government, expects stagnation this year. Previously, GDP was projected to rise by 0.4%. 

Experts note the unfavorable impact of current economic weakness on the labor market. The number of unemployed in Germany has approached 3 million for the first time in 10 years. 

Additionally, the council projects Donald Trump's tariffs will deal a serious blow to Germany's export-oriented economy. In 2024, the US was Germany's largest trading partner, with trade between the two countries totalling 253 billion euros ($286.6 billion).

Meanwhile, as noted by the council chairwoman Monika Schnitzer, the fiscal plan that includes a fund for infrastructure investments may boost GDP, which is forecast to grow 1.0% next year. 

Private consumption is also set to rise in 2026 compared to 2025. However, according to the council, due to uncertainty caused by the US tariffs, it is unclear whether this will spur economic growth.

Experts forecast inflation at 2.1% this year and 2.0% next year. At the same time, the impact of trade conflicts on prices in Germany remains unknown.