After two years of declining output, Germany’s struggling economy resumed small growth last year, according to official numbers, raising expectations that government spending on defense, railroads, and bridges may help put an end to years of stagnation.
The German Federal Statistical Office reported on Thursday that while exports declined due to President Donald Trump’s more restrictive US trade policy, the GDP grew by 0.2% in 2025 due to increased consumer and government spending. This comes after shrinking of 0.9% in 2023 and 0.5% in 2024.
In a statement that accompanied the statistical release, Ruth Brand, head of the statistical office, stated that “Germany’s export business faced strong headwinds owing to higher US tariffs, the appreciation of the euro and increased competition from China.
As a result of Russia’s perceived increased danger following its invasion of Ukraine, defence spending is increasing. Following the COVID-19 pandemic, Germany has experienced a protracted period of stagnation.
An economy that is mostly dependent on exports has been hindered by rising energy costs as a result of the conflict in Ukraine and growing Chinese competition in important German specialties like automobiles and industrial gear. Subsequently, Trump increased import levies, or tariffs, on European Union products.
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