Investing.com — The German government has significantly reduced its growth forecast for the year 2025 to just 0.3%, a sharp decrease from the previous estimate of 1.1%.
This information was reported on Friday by the newspaper Handelsblatt, citing government sources.
The move comes in the wake of a sluggish economy that has failed to recover from two consecutive years of contraction.
In 2021, Germany’s economy, which is the largest in Europe, experienced a decrease for the second year in a row. The economic downturn was due to a variety of factors, including foreign competition, high energy prices, persistently high interest rates, and uncertain business conditions.
Official statistics released last week showed that the German economy contracted by 0.2% over the course of the full year.
The state of the economy played a major role in the breakdown of German Chancellor Olaf Scholz’s three-party coalition last year. Disagreements over strategies to stimulate the economy were a primary cause of the coalition’s collapse.
As the national elections approach on Feb. 23, the economy is the most pressing issue for German voters, according to polls.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
