Germany economy outlook: Growth forecast rises to 0.2% in 2025; rebound expected at 1.3% in 2026

The German government on Wednesday raised its growth projections, saying Europe’s largest economy is now expected to narrowly avoid stagnation in 2025 before accelerating to 1.3% in 2026. The previous forecast in April had predicted zero growth for 2025 this had been upgraded to 0.2%,, while the estimate for next year has been upgraded from 1.0% to 1.3%, the economy ministry said, reported AFP.Economy Minister Katherina Reiche said the revised projections highlighted the urgency for decisive reforms to spur growth. “We need the courage to take decisive reforms,” she told a press conference, pointing to the need to lower energy prices and reduce taxes.Germany’s manufacturing sector continues to face headwinds from high energy costs, stiff foreign competition, and the impact of new US tariffs on EU products. Official data released on Wednesday showed a sharp decline in industrial production in August, particularly affecting the automotive sector.