German GDP, first quarter of 2025

Germany’s economy expanded by 0.2% in the first quarter since the previous period of three months, preliminary data showed on Wednesday, since US tariff tensions threaten the country’s growth perspective.

The figure, published by the German Federal Statistics Office, is adjusted for the price, calendar and seasonal variations.

The gross reading of the domestic product was in line with the estimates of the economists surveyed by Reuters. Germany’s national national had hired 0.2% in the fourth quarter.

The Statistics Office attributed the quarterly increase to the fact of “both the final spending of final consumption and capital formation were higher than in the previous quarter.”

The largest economy in Europe has been slow for a long time, with its flip-floping between growth and contraction in each quarter throughout 2023 and 2024. Until now, the country has avoided the technical recession, which is defined by two consecutive trimesters of contraction.

The key sectors of the economy, such as cars, have suffered a stronger competition in China. Other industries, including housing and infrastructure construction, have also been going through difficult times that have been related to higher costs, silenced investment and bureaucratic obstacles.

Separately, the tariff policies of the president of the United States, Donald Trump, have promoted the uncertainty to export that depends on Germany, which has the United States as its most important trading partner.

As part of the European Union, Germany faces 20% of general tariffs of the goods exported to the US., Although these taxes have been temporarily reduced to 10% to allow time for negotiations. The duties of the United States on steel, aluminum and cars also affect the country.

The German government last week Cut your economic perspective To predict the stagnation in 2025, with the outgoing Minister of Economy, Robert Habeck, saying that Trump’s commercial policies and their impact on the country were the main factor behind the review.

A brilliant point could arise on the horizon. Germany earlier this year made changes to its fiscal rule of long -standing debt brake, which allows a higher defense expense and creating a fund of 500 billion euros ($ 570 billion) dedicated to infrastructure and climatic investments.

This movement has widely considered As a positive change for the German economy, although much depends on how changes are implemented.

Although the economy of Germany has been slow, the local inflation rate has approached the 2% target of the European Central Bank. The country’s consumer price index, harmonized for comparability in the euro zone, reached 2.3% in March annually, below 2.6% in February.

Preliminary inflation figures will be taken later on Wednesday, with economists surveyed by reuters that estimate a 2.1%reading.

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