German economy grew 0.2 percent in 2025

"Europe's largest economy reversed its downward trajectory last year after two years of recession, with growth driven by household and government spending. Germany's economy expanded by 0.2 percent in 2025, returning to growth after two years of recession, official data showed Thursday, despite challenges ranging from the US tariff blitz to weak demand in China. The growth was mainly due to increased spending by private households and by the government, Ruth Brand, head of Germany's statistics agency Destatis, said in a statement."

"The performance of Europe's biggest economy remained subdued however due to a decline in exports, she said. "Germany's export business faced strong headwinds owing to higher US tariffs, the appreciation of the euro and increased competition from China," Brand said. Investment also remained weak last year, and fell in the construction and machinery manufacturing industries, according to the provisional data released by Destatis."

Official data show Germany's economy expanded by 0.2 percent in 2025, returning to growth after two years of recession. The uptick was mainly driven by increased spending by private households and by the government. Export performance declined, weighed down by higher US tariffs, a stronger euro and growing competition from China. Investment remained weak and fell in construction and machinery manufacturing. The economy grew 0.2 percent in the final quarter compared with the third quarter. Previous shocks included an energy shock from the Ukraine war, a manufacturing slump, US tariffs and weakening Chinese demand that caused contractions in 2023 and 2024. Political pressure on the government may ease.

Read at The Local Germany