Germany's Economy Sees Glimmer of Hope: 2025 Growth Forecast Revised Up to 0.2%
Published Time：
2025-10-13 13:15
Source：
October 8, 2025 — German Minister for Economic Affairs and Energy Katharina Reiche announced the federal government's autumn economic forecast in Berlin, revising the 2025 growth expectation upward from "zero growth" in spring to 0.2%. This adjustment signals a clear, albeit modest, recovery for the German economy after two consecutive years of economic adjustment, laying the foundation for steady growth in the coming years.
The recovery is primarily driven by a sustained rebound in domestic demand. The federal government's statement highlighted that stable price levels, rising wages, and relief policies for households will significantly increase real disposable income in the coming years. Meanwhile, an expected improvement in labor market conditions is set to boost consumer confidence, driving demand in consumer-facing sectors such as retail and catering—forming a virtuous cycle of "rising income, increased spending, and economic recovery."
Government spending is serving as a "boost" to the economic rebound. Reiche noted that Germany's growth in the coming years will benefit significantly from large-scale government expenditure plans, including special funds and defense investments. These policies not only provide immediate momentum but also support long-term economic restructuring through infrastructure upgrades and industrial support. Although she emphasized that "investments must be implemented promptly to unleash their full effect," the government's commitment to "breaking the reform stagnation and advancing structural reforms" has further bolstered market confidence in Germany's long-term economic prospects.
Looking ahead, Germany's growth outlook remains positive: 1.3% growth is projected for 2026, accelerating to 1.4% in 2027. From recovering domestic demand to targeted policy support, and from short-term revival to medium- and long-term growth momentum, the German economy is gradually emerging from its adjustment phase. With a dual-driven model of "domestic demand and policy backing," it is moving toward a more stable growth trajectory—demonstrating not only the resilience of Germany's economy but also sending a positive signal for Europe's economic stability.
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