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Germany’s economy will stagnate this year as tariffs cast a shadow, advisers say

  • Germany's Council of Economic Experts reported on May 21, 2025, that Europe's largest economy will stagnate throughout 2025.
  • This stagnation follows two consecutive years of GDP contraction and results partly from the trade risks posed by US President Donald Trump's tariffs.
  • The economy has also faced challenges such as rising competition from Chinese firms, rising electricity prices, and structural issues like bureaucracy and workforce shortages.
  • Monika Schnitzer, chair of the expert panel, warned that Trump's tariffs are creating global economic instability and posing risks to growth, while highlighting that substantial investment initiatives proposed by Merz’s coalition could support infrastructure modernization in Germany and foster stronger economic prospects.
  • Despite stagnation in 2025, forecasts predict modest growth of about 1% in 2026 supported by a €500 billion multi-year fiscal investment plan aimed at infrastructure and digitalization.
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regionalmedianews.com broke the news in on Wednesday, May 21, 2025.
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