HOME BLOG International News Escape from two-year recession, German economy achieves slight growth in 2025
Escape from two-year recession, German economy achieves slight growth in 2025
After two consecutive years of recession, the German economy is growing. On the 15th, the German Federal Statistical Office announced that according to preliminary calculations by the German Federal Statistical Office, after price adjustment, Germany's gross domestic product (GDP) will grow by 0.2% in 2025.
Rutte Brand, director of the German Federal Statistical Office, said in a statement that the growth was mainly due to an increase in household and government consumer spending. Facing the strong impact of rising US tariffs, the appreciation of the euro and external competition, the German export industry has declined again. Additionally, investment weakness continues.
Data show that the output of the German manufacturing industry will decrease for the third consecutive year in 2025, down 1.3% year-on-year, with large industries such as automobiles and mechanical engineering experiencing significant declines. Affected by factors such as continued high construction costs, the construction industry fell by 3.6%. The service industry had mixed results, with sports, entertainment and other industries declining year-on-year; trade, transportation, accommodation and catering services increased by 1.2%, and public services, education and health industries also increased by 1.4%.
In terms of investment, Germany's total asset investment fell by 0.5%, of which construction investment fell by 0.9%, the fifth consecutive year of decline; investment in equipment such as machinery, tools and vehicles fell by 2.3%. Government investment increased significantly but did not offset the decline in equipment investment.
In terms of consumer spending, in 2025, both household and government consumption expenditures in Germany will increase significantly, with household consumption expenditures increasing by 1.4% and government consumption expenditures increasing by 1.5%. In terms of foreign trade, German exports fell again by 0.3% in 2025, falling for the third consecutive year. In contrast, after two years of decline, German imports increased significantly by 3.6% in 2025.
In 2023 and 2024, Germany's GDP will see consecutive negative growth, setting a bad record since 2003. German economic research institutions generally predict that the German economy is expected to experience more significant growth in 2026.
Rutte Brand, director of the German Federal Statistical Office, said in a statement that the growth was mainly due to an increase in household and government consumer spending. Facing the strong impact of rising US tariffs, the appreciation of the euro and external competition, the German export industry has declined again. Additionally, investment weakness continues.
Data show that the output of the German manufacturing industry will decrease for the third consecutive year in 2025, down 1.3% year-on-year, with large industries such as automobiles and mechanical engineering experiencing significant declines. Affected by factors such as continued high construction costs, the construction industry fell by 3.6%. The service industry had mixed results, with sports, entertainment and other industries declining year-on-year; trade, transportation, accommodation and catering services increased by 1.2%, and public services, education and health industries also increased by 1.4%.
In terms of investment, Germany's total asset investment fell by 0.5%, of which construction investment fell by 0.9%, the fifth consecutive year of decline; investment in equipment such as machinery, tools and vehicles fell by 2.3%. Government investment increased significantly but did not offset the decline in equipment investment.
In terms of consumer spending, in 2025, both household and government consumption expenditures in Germany will increase significantly, with household consumption expenditures increasing by 1.4% and government consumption expenditures increasing by 1.5%. In terms of foreign trade, German exports fell again by 0.3% in 2025, falling for the third consecutive year. In contrast, after two years of decline, German imports increased significantly by 3.6% in 2025.
In 2023 and 2024, Germany's GDP will see consecutive negative growth, setting a bad record since 2003. German economic research institutions generally predict that the German economy is expected to experience more significant growth in 2026.
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