Frankfurt/Main (dpa) – Despite mini growth in the first quarter, the German economy is at risk of the next crisis year. In the first three months, economic output increased by 0.2 percent for the previous quarter, as the Federal Statistical Office calculated based on preliminary data. Both private consumption expenditure and the investments have grown.
However, the third year of recession in a row threatens in the whole year, not least because US President Donald Trump’s aggressive customs policy has had the economic outlook worldwide. In the final quarter of 2024, the German economy had shrunk by 0.2 percent.
“Way out of stagnation is long”
Table of Contents
“The plus compared to the fourth quarter should not hide the fact that the German economy is not facing a long-term, strong relaxation,” said Commerzbank chief economist Jörg Krämer. The huge financial package of the federal government is likely to push the economy in the coming year. However, many companies “missed an economic political restart that would be necessary after years of erosion of location quality”.
The weak economy is noticeable on the job market. Thanks to a slight spring revival of 36,000, the number of unemployed in Germany in April fell to 2.932 million people on the previous month. But that is 182,000 more than a year ago, as the Federal Employment Agency in Nuremberg announced.
Customs dispute covers economic hopes
U.S. President Donald Trump has put a stir with his XXL Zoll package trading partner and financial markets, his zigzag course ensures additional uncertainty-this is poison for the global economy.
The sharp headwind through the US tariffs will probably only be really reflected in the second half of the year with German exports, said Michael Herzum, Head of Economics at the Fund provider Union Investment. Many companies have preferred their exports to be expected of higher tariffs. Therefore, economic output could be solid in the coming quarter. “But the way out of the stagnation of recent years is long.”
Germany is particularly affected as an exporting of Trump’s customs offensive: the United States is Germany’s important trading partners ahead of China and the Netherlands and the largest buyers of German exports. In 2024, a good ten percent of all German exports – were a total value of a good 161 billion euros – to the United States.
German economy in the permanent crisis
Instead of the longed -for upswing after two years, Europe’s largest economy threatens the third year without growth in a row – this has never been the case in the history of the Federal Republic. In the past few weeks, the already low expectations have been reduced in the past few weeks.
The executive federal government expects a stagnation of gross domestic product (GDP) this year. In January she still expected an increase of 0.3 percent. The International Monetary Fund (IMF) also does not allow the German economy to grow in the current year. The IMF expects a global growth doldrum due to Trump’s aggressive customs policy.
New federal government wants to boost economy
The Union and the SPD have decided to quickly get a number of measures after the change of government in Berlin to boost the domestic economy: lower energy costs and corporate taxes, more flexible labor law, less bureaucracy. The CDU politician and energy manager Katherina Reiche is said to succeed Robert Habeck (Greens) and lead the German economy out of the crisis.
The domestic economy is likely to be inspired by the huge billion dollar package of the federal government for defense and infrastructure – if not immediately. From 2026, the IMF expects positive effects of the billion dollar financial package on the German economy. Then, according to economists, the economic flaut in this country could come to an end: they trust the German economy in 2026 between one and one and a half percent growth.
