German Central Bank Downgrades Growth Projections for 2025 and 2026

The German economy is facing significant challenges, according to Bundesbank President Joachim Nagel. The country\u0027s economic growth is being hindered by both persistent economic headwinds and structural problems.

Key Points

• Industry and Exports Affected: Industry and exports are being impacted by economic obstacles.

• Private Consumption Increasing Steadily: Private consumption is expected to increase steadily, but not as much as previously anticipated due to growing concerns about the labor market.

• Exports Decline: German companies shipped fewer goods abroad in October, with exports shrinking by 2.8% compared to September and 2.8% compared to the same month last year.

Bundesbank\u0027s Forecast

The Bundesbank has downgraded its economic forecast for the next two years:

• 2025: Output is expected to grow by a mere 0.2%, down from the previously forecasted 1.1%.

• 2026: Growth is predicted at 0.8%, significantly lower than the anticipated 1.4%.

• 2024: The Bundesbank expects German economic output to decline by 0.2%, contrary to its previous forecast of a 0.3% increase in real gross domestic product (GDP).

Uncertainty Factor

Bundesbank President Nagel highlighted the uncertainty factor for the forecast: a possible increase in protectionism globally.

Source:

Germany\u0027s Economic Growth Outlook Downgraded by Central Bank

Persistent Economic Woes and Structural Issues Cited as Reasons

Industry and exports are being affected by these issues, along with investment. Private consumption is expected to increase steadily, but at a slower rate than previously anticipated due to growing concerns about the labor market.

Export Numbers Show Decline

Protectionism a Major Concern

Central Bank Downgrades Growth Outlook

• 0.8% in 2026 (down from a previous forecast of 1.4%)

German central bank slashes growth outlook for 2025, 2026