Germany economy outlook: Growth forecast rises to 0.2% in 2025; rebound expected at 1.3% in 2026

TOI Business Desk / TIMESOFINDIA.COM / Updated: Oct 08, 2025, 18:22 IST

Text Size

Small
Medium
Large

Germany's economic outlook has brightened, with the government now anticipating a slight avoidance of stagnation in 2025 and a 1.3% growth in 2026. Economy Minister Katherina Reiche stressed the need for "decisive reforms," including lower energy prices and tax reductions, to boost the economy. Despite this optimism, the manufacturing sector still grapples with high energy costs and global competition.

Germany economy outlook: Growth forecast rises to 0.2% in 2025; rebound expected at 1.3% in 2026

The German government on Wednesday raised its growth projections, saying Europe’s largest economy is now expected to narrowly avoid stagnation in 2025 before accelerating to 1.3% in 2026. The previous forecast in April had predicted zero growth for 2025 this had been upgraded to 0.2%,, while the estimate for next year has been upgraded from 1.0% to 1.3%, the economy ministry said, reported AFP.Economy Minister Katherina Reiche said the revised projections highlighted the urgency for decisive reforms to spur growth. "We need the courage to take decisive reforms," she told a press conference, pointing to the need to lower energy prices and reduce taxes.Germany’s manufacturing sector continues to face headwinds from high energy costs, stiff foreign competition, and the impact of new US tariffs on EU products. Official data released on Wednesday showed a sharp decline in industrial production in August, particularly affecting the automotive sector.

About the AuthorTOI Business Desk

The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.

End of Article