Germany's economy, once the engine of European growth, has barely expanded since 2020, raising concerns over the future outlook, mainly due to weakening industrial performance and the automotive sector crisis.
Although Germany emerged from two years of recession in 2025, gross domestic product (GDP) grew 0.2%, too little to offset the preceding downturn.
The GDP rebounded 3.7% in 2021 and 1.4% in 2022 following the 4.1% pandemic contraction in 2020. Output then fell 0.9% in 2023 and 0.5% in 2024.
The economy grew 0.4% quarter-over-quarter in the first three months of 2026 and 0.2% in the second quarter.
Investment declined in April-June, showing the expansion was not broad-based.
