The German economy is waiting for the economic turnaround. As in the first half of 2025 overall, real gross domestic product stagnated in the 3rd quarter. A difficult international environment and a so far only tentative implementation of reforms by the new government – overshadowed by recurring disruptions within the coalition – continued to slow down economic development. However, following the settlement of the tariff issue with the USA and the gradual implementation of fiscal spending programmes and support measures, the economic climate should improve. This should be reflected in the corresponding statistics in the last months of this year, but especially from next year, especially in the case of investment in construction and equipment. Government and private consumption will also continue to support the economy. Only the balance of exports will have a negative effect with only weak exports and stronger growth in imports. For 2025, the HWWI continues to expect economic growth of 0.2% on an annual average. With increased economic momentum as a result of the fiscal programmes and support measures, economic growth of 1 1/2% is then expected for 2026 and 2027, especially as more working days (2026 a total of 2 1/2 more than in 2025, another 1 1/4 more in 2027).

The German economy stagnated overall in the 1st half of 2025; German gross domestic product fell by 0.3% in the second quarter, as it had risen in the first quarter. Special effects (bringing forward production and exports to the first quarter due to expected US tariffs and mild winter weather) played a role in this, and the new government only took up its work in May and the economy initially waited for its reform plans. After the coalition parties had already greatly expanded the debt possibilities for the infrastructure and defence sectors before the government took office, it has now also introduced the first measures to improve the location conditions. This should ease the previous reluctance of investors and provide growth impetus in the future. Private consumption has been supporting the economy for some time. However, further dampening influences come from the export side, because despite the “tariff deal” with the USA, tariffs on US exports are now higher than in the pre-Trump era. Overall, however, the positive impulses will outweigh the negative impulses in the future, so that a gradual revival of the economy is to be expected for the rest of this year, which will then continue to intensify next year. The HWWI continues to expect economic growth of 1/4 % on average for 2025 and 1 1/2 % for 2026.