German economy performed better than expected in Q1 2025

Germany's economy demonstrated an unexpectedly robust performance in the first quarter of 2025, surging by 0.4%, as Bloomberg reported. The GDP had initially been expected to grow by only 0.2%, but consumer and business activity have proven to be stronger than anticipated, thus providing a significant boost.

Ruth Brand, the head of the Federal Statistics Office, noted that the hike in manufacturing output in March was key to this economic upswing. In addition, companies ramped up their export contracts in response to potential US tariffs. The result was improved foreign trade figures.

The whole situation is still pretty shaky, all because of US import policies, she said. Although the government is working hard to stimulate investment within the country, ongoing trade restrictions are hindering the development of the export sectors. 

In response, German authorities have devised a strategy to address these challenges. According to Bloomberg, the plan includes a large-scale infrastructure modernization costing hundreds of billions of euros. Experts from the agency project that implementing this program could accelerate economic growth to 1.2% by 2026, with rates potentially hitting 1.7% by 2027.