Growth expectations are currently linked to internal resources

The German economy will grow slightly in the last quarter of 2025, according to an indicator from the Institute for Macroeconomic Policy (IMK) at the Hans Beckler Foundation, Reuters reports.

The IMK indicator aggregates the latest available data on key economic variables. It shows a 34.8% probability of recession, which does not imply acute risks for economic growth.

Sebastian Dullien, IMK’s research director, noted some bad economic news in recent weeks, especially regarding weak exports. According to him, in the coming months, the German economy cannot hope to emerge from the crisis through exports, as it has in the past. Hopes for growth are now linked to domestic resources.

Germany’s exports fell by 0.5% in August compared to July due to a sharp decline in demand for European imports in the US caused by tariffs. Supplies to the United States during this period fell by 2.5% month-on-month and 20.1% year-on-year.

Recall that the German government has raised its economic growth forecast for 2025 to 0.2%. Although additional spending on infrastructure and defense is expected to boost the economy in the long term, in the short term it will face difficulties due to the trade war with the US.

The country’s Ministry of Economy also expects growth of 1.3% in 2026 and 1.4% in 2027. Previous forecasts were 1% and 0%, respectively.