German economy: recovery on track! Growth hopes for 2025!

German economy: recovery on track! Growth hopes for 2025!

The German economy is showing signs of a significant recovery in 2025, which could also strengthen in the coming years. The growth forecasts see an increase of 0.2% for the gross domestic product (GDP) in 2025 and an increase of 1.5% in 2026. This positive development exceeds expectations for the United States and the euro area. Loud Boeckler The main drivers of this recovery are increasing consumption by private households, government investments and investment support measures.

Nevertheless, foreign trade remains weak, which is due to ongoing international trade conflicts. These conflicts are hindering the German export economy, which overall recorded a decline in exports of 2.4% in 2025 and low growth of 0.7% in 2026.

Labor market and inflation

The labor market is under pressure: the unemployment rate is expected to rise to 6.3% in 2025 and to 6.4% in 2026. A decline in the number of employed people of 0.1% is expected in 2025, although this could be compensated for by minimal growth of 0.2% in 2026. The number of unemployed people will increase by around 170,000 people to 2.96 million in 2025. At the same time, tax revenues can record moderate increases, while the general government deficit will be above the Maastricht criterion of 3% at 2.4% for 2025 and 3.1% for 2026.

The inflation rate will average 2.0% in 2025 and 1.8% in 2026. Although economic indicators show a positive direction, uncertainty remains; Risks such as the escalation of international trade conflicts, a possible recession in the USA and geopolitical conflicts in the Middle East could jeopardize the recovery.

Investment and world trade

Government investments are estimated at 8 billion euros for 2025 and 40 billion euros for 2026. In addition, equipment investments will grow by 0.6% in 2025 and even by 6.6% in the following year. Construction investment also recorded increases of 0.5% and 3.1% for 2025 and 2026. Despite optimistic domestic expectations, global trade grew only 1.9% in 2025 and 2.1% in 2026, indicating a continued challenging international trade environment.

The DIHK offers regular economic indicators that provide information about the health of the German economy. These indicators include data on new orders, production capacity and consumer prices and serve as a valuable basis for forecasting economic growth, employment and inflation.

Overall, the current forecasts show a mixed outcome for the German economy, which is on a recovery path but continues to be burdened by external factors.