The German economy faces persistent challenges, with industry and exports affected by structural problems. The Bundesbank has downgraded its growth projections for 2024, 2025, and 2026 due to concerns about the labor market and global protectionism.
The German economy is facing persistent economic headwinds and structural problems, according to Bundesbank President Joachim Nagel.
The issues primarily affect industry and exports, as well as investment. Private consumption will increase steadily, but not as much as previously expected, partly due to increasing nervousness about the labor market.
Exports declined by 2.8% in October compared to September, with a value of €124.6 billion. This decline was the sharpest of the current year and compares to a 2.8% fall in exports compared to the same month last year.
The German Bundesbank has drastically trimmed its economic forecasts for the next two years:
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Output is expected to grow by only 0.2% in 2025, down from a June forecast of 1.1%.
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Growth is predicted at 0.8% for 2026, well down on the previously expected 1.4%.
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The forecast is even more pessimistic for the current year, with the Bundesbank expecting German economic output to decline by 0.2% in 2024.
The biggest uncertainty factor for the forecast at the moment is a possible increase in protectionism globally, warned Nagel.
