Germany’s economy will return to growth in 2025 after two years of contraction, according to analysts surveyed by Bloomberg who are a little more upbeat on the country’s near-term prospects than other forecasters.
Respondents see gross domestic product in Europe’s largest economy rising 0.2% this year — a rosier outlook than the stagnation they predicted in May’s poll. For 2026 and 2027, as sharply higher government outlays on infrastructure and defense kick in, they project expansion of 1.1% and 1.7%.
“Some measures in the new federal government’s emergency program do point in the right direction,” said Dennis Huchzermeier, senior economist at the Handelsblatt Research Institute. At the same time there are “significant burdens” such as the jump in the minimum wage and a “looming explosion” in social security contributions, he said.
Germany made a good start to 2025 with stronger-than-expected growth, though that was partly down to businesses and exporters attempting to get ahead of expected US tariffs. That could yet reverse.
The Bundesbank this month predicted stagnation for the year as a whole, downgrading its December call for a 0.2% increase in GDP as firms grapple with trade uncertainty. That view is in line with many national forecasters and global institutions, including the International Monetary Fund.
