FX.co ★ Germany’s GDP Grows 0.2% in 2025

Germany's GDP grew by 0.2% in 2025, according to preliminary estimates, marking a recovery from the 0.5% contraction experienced in 2024. This growth signifies the conclusion of two consecutive years of economic contraction, driven primarily by increased household consumption and government expenditure. However, the export sector continued to face challenges, impacted by higher U.S. tariffs, a robust euro, and intensified competition from China. Investment remained sluggish, with fixed capital formation in machinery, equipment, and construction witnessing declines compared to the previous year. Sector-wise, manufacturing output decreased for the third straight year, with the automotive industry and machinery and equipment manufacturing suffering significant losses. The construction sector encountered another challenging year, as elevated costs led to a rise in insolvencies. The services sector presented a varied picture, as business services experienced a downturn, whereas trade, transport, accommodation, and food services offered some support to the overall economy.