We see significant downside risks to Germany’s GDP growth, which is already projected to be weak. We estimate economic output to stagnate at -0.1% this year and continued stagnation next year with GDP growing by around 0.1%, down from our previous forecast of around 0.9% for 2025. This forecast is subject to a high degree of uncertainty depending on the scale and timing of potential trade disruptions, the expected decline in business confidence and associated investment delays, as well as the next government’s fiscal stance.
Repercussions of a Trump Presidency Are Wide-ranging
The US, Germany’s second largest trading partner after China and largest single export destination, is expected to impose higher import tariffs, which would pose a significant setback for Germany’s export-dependent economy.
Almost 10% of German exports were destined for the US in 2023 – the highest share in more than…
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