Germany's Economic Outlook Mixed: Q2 Shrinkage, Q4 Growth, Trade Uncertainty
The German economy faces a mixed outlook. While growth in the final quarter of 2024 was revised to show a slight increase, the economy shrank by 0.1 percent in the second quarter. The trade dispute between the USA and the EU adds uncertainty to 'Made in Germany' exports.
The Bundesbank initially predicted stagnation in the third quarter but now considers a slight GDP increase possible, which would prevent a third consecutive year without growth. However, it expects 'no growth impulses' from domestic industry in the same period.
Economic researcher Oliver Holtemöller has offered a more optimistic forecast for the third quarter of 2025, providing a glimmer of hope amidst the uncertainty.
The German economy's future remains uncertain, with the trade dispute and domestic industry's lack of growth impulses posing challenges. The slight increase in GDP in the final quarter of 2024 and Holtemöller's optimistic forecast offer some hope, but the situation requires close monitoring.
