German Government Forecasts Economic Growth of 0.3 Percent
Berlin, January 29, 2025 – The German government has released its economic forecast for 2025, predicting a modest growth of 0.3 percent. This follows a 1.3 percent growth in 2024, marking a significant slowdown in economic activity.
The forecast is based on several factors, including the ongoing geopolitical uncertainties, high energy prices, and ongoing supply chain disruptions. The government acknowledges the challenging external environment but remains cautious in its outlook.
The German economy has traditionally been export-oriented, but the global economic slowdown has impacted demand for German goods. The conflict in Ukraine and its aftermath have also disrupted supply chains and increased transportation costs, further weighing on economic growth.
Despite these challenges, the government is implementing measures to mitigate the impact of the global economic headwinds. These include expanding public investment, providing support to businesses, and promoting innovation.
The government’s fiscal deficit is expected to increase to 2.5 percent of gross domestic product (GDP) in 2025, primarily due to the increased spending on infrastructure and business support. However, the government emphasizes that this deficit is necessary to support the economy and is within the European Union’s fiscal rules.
The government expects inflation to remain elevated in 2025, but at a more moderate pace than in 2024. The European Central Bank has recently raised interest rates to combat inflation, which could further slow economic growth.
The German economy is resilient and has weathered numerous challenges in the past. The government’s forecast reflects the current uncertainties but also emphasizes the measures being taken to support businesses and promote growth. The government remains committed to maintaining fiscal stability and fostering a positive investment climate to ensure the long-term health of the German economy.
Regierung erwartet Wirtschaftswachstum von 0,3 Prozent
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