Germany: In 2025, institutes await mini growth in 2025

The customs policy of US President Donald Trump presses economic growth in Germany, according to leading economic research institutes. The five institutes for the current year forecast a mini growth of 0.1 percent of gross domestic product (GDP).

Further losses are possible in view of the other tariffs announced at the beginning of April and are now partly on ice, it said in the so -called community diagnosis presented in Berlin.

Germany threatens low growth, perhaps even stagnation after two years of recession – i.e. persistently shrinking economic output. “The geopolitical tensions and the Protectionist trading policy of the United States tighten the already tense economic situation in Germany,” said Torsten Schmidt, economic head of the RWI-Leibniz Institute for Economic Research.

The economists expect the US tariffs to press aluminum, steel and cars of 25 percent, including the EU counter tariffs, GDP this and the coming year by 0.1 percentage points each. This effect has already been calculated for the current year with the expected mini growth of 0.1 percent.

When Trump’s recent customs increases from early April and counter -tariffs are added, the losses should double to 0.2 percentage points in both years, the experts. However, the concrete effects were difficult to name – especially since a negotiating solution was still conceivable.

“There have been no such high customs sets in the United States since the Great Depression of the 1930s,” the experts write – and the effects of import taxes were difficult to quantify. This brakes world trade: production becomes expensive, plus the unpredictability. Investors are therefore likely to postpone decisions. At their previous forecast in autumn, the institutes still expected 0.8 percent growth.

As in autumn, the institutes await 1.3 percent for the coming year – but starting from a lower level. 0.3 percentage points go back to a higher number of working days.

“What our export industry has actually weakened in recent years was the increasing competition from China,” says Timo Wollmerhäuser from the Munich IFO Institute. On the one hand, exports have decreased to China, on the other hand, the country competes with Germany on world markets in products that Germany has long dropped there. There are also relocations from Germany there, for example in the car industry. And with the new US tariffs, it is likely that more Chinese products were pressing onto the market here.

Germany has structural problems. Part of the energy -intensive industry broke away permanently, the experts write. Accordingly, the employment population shrinks and the bureaucracy presses.

The institutes’ council: secure social security systems in an aging society, more incentives to work and qualified immigration. Energy prices would have to fall, greenhouse gas savings would have to be achieved primarily via a CO2 price. A “crushing debusturization” is also necessary.

The expectant coalition of the CDU/CSU and SPD has given itself a financially air with the help of the Greens. The debt brake has been relaxed for defense spending, and 500 billion euros from a special fund are available, especially for investments in the infrastructure. The economists assume that politicians are making less efforts to save.

According to the forecast, hardly any additional funds should flow for the current year. For 2026, on the other hand, the institutes expect additional expenditure of almost 24 billion euros and a 0.5 percentage point higher Great GD growth, which they have already calculated in their growth expectations.

Schmidt warned that the economy cannot implement large expenses for infrastructure overnight. Here it is challenged so that the new funds not only fueled inflation. According to the experts, the economy in Germany should not benefit from the higher defense spending. Germany will have to import armaments if it wanted to upgrade quickly.

Even if people have more money in their pockets again, private consumption increased little last year at 0.3 percent. A lot of money flowed into savings, the savings rate was 11.4 percent in 2024 – so much of the available income did not spend private households out, but put it back.

The long inflation has been weakened to 2.2 percent last year. The institutes expect that the level of inflation will stay this way in the current year and will easily drop to 2.1 percent in the coming year.

According to the report, the unemployment rate may increase from 6.0 percent in the past 6.3 percent in the current year and will fall again to 6.2 percent in the coming year. Workplaces were lost, especially in the processing of businesses, construction and company service providers. In the public service, in the upbringing and in the health sector, new jobs would be created.

The “Community Diagnosis” is created on behalf of the Federal Ministry of Economics by the German Institute for Economic Research, the IFO Institute, the Kiel Institute for the World Economy, the Leibniz Institute for Economic Research Hall and the RWI-Leibniz Institute for Economic Research. It flows into the government forecast, on the basis of which the tax revenue is estimated.