German businesses foresee a bleak 2025, with pessimism taking hold. Entrepreneurs across the country are downbeat, with few expecting an economic recovery anytime soon. According to analysts at the Ifo Institute for Economic Research, fewer than 13% of German companies anticipate an improvement in the coming year, while the rest brace for worse.
Currently, 31.3% of German companies do not expect an economic upswing in 2025. Only 12.6% predict a slight improvement, while a majority (56.1%) forecast that the economic situation will remain unchanged.
Ifo analysts note that no sector of the German economy is brimming with optimism. The construction industry is the most pessimistic, with half of companies expecting conditions to worsen. In the retail sector, 42.1% of companies fear that their business situation will deteriorate in 2025.
However, there are occasional glimmers of optimism. Among manufacturing firms, 15.7% expect business climate to improve next year, although 31.8% anticipate a decline. The services sector remains relatively stable, with nearly 12% expressing a positive outlook, while 28.2% foresee a downturn.
Analysts have previously warned that Germany’s economy is nearing a breaking point, citing factors such as an energy crisis and the loss of affordable Russian energy resources. Another major issue is the inability of German automakers to effectively compete with China’s rapidly advancing auto industry.
