The German government has downgraded its economic growth forecast for 2025 to 0.3%, a significant reduction from the previous 1.1% estimate. This shift is attributed to several factors, including the collapse of Chancellor Olaf Scholz’s coalition government in November and associated disruptions to growth-promoting measures. Additionally, increased uncertainties in trade notably arising from US President Donald Trump’s return to the White House further exacerbated the outlook. Amid ongoing economic stagnation, recent surveys indicate a mix of cautious sentiment among the population regarding their financial futures.
The revision of the growth forecast was mainly due to the collapse of the government last November, which led to a disruption in measures intended to encourage growth.
Germany is stuck in stagnation,” Economy Minister Robert Habeck stated, highlighting concerns over the nation’s prolonged economic challenges following two years of recession.
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