The economy German economy growing faster than expected at the end of 2025
After two years of recession, the German economy is growing slightly again in 2025. The final quarter is even more positive than expected. Nevertheless, the big upswing is still a long time coming.
30.01.2026, 11:07
SDA
In the final quarter of 2025, gross domestic product (GDP) increased slightly more than initially expected compared to the previous quarter. This resulted in an increase of 0.3 percent, as announced by the Federal Statistical Office on Friday.
In an initial assumption, the statistics authority had assumed economic growth of 0.2 percent. Private and government consumer spending in particular increased, it said.
The authority confirmed previous figures for 2025 as a whole: With 0.2 percent growth, Germany narrowly missed the third year without economic growth. In 2023 (minus 0.9 percent) and 2024 (minus 0.5 percent), Europe's largest economy slipped into recession.
Hoping for billions from the state
In the current year, billions in government spending on infrastructure such as roads and railways as well as on defense should provide a boost. The economy should also be helped by the fact that there will be more working days in 2026 because more public holidays will fall on a weekend.
The International Monetary Fund (IMF), for example, expects the German economy to grow by 1.1% this year. The German government expects growth of 1.0 percent.
Economists do not expect a noticeable upturn until 2027, when the huge sums of money that the state is spending will take full effect. However, reforms are essential to ensure that the easing of the debt brake and the spending made possible as a result do not create a flash in the pan.
Exports under pressure
US President Donald Trump continues to cause uncertainty with his repeated threats of new tariffs. Last year, higher tariffs caused exports "Made in Germany" to Germany's most important export country, the USA, to collapse.
Exports shrank by 0.3 percent, the third year in a row. Competition from China is also causing problems for Germany as an export nation. This is weighing on the industry, where tens of thousands of jobs have been cut, particularly in car manufacturing.
