The effects of the aggressive customs policy of US President Donald Trump can also be felt in Germany-de Economy this year will probably no longer grow. “It will be crucial that we do our homework ourselves,” Minister of Economy Robert Habeck (Greens) appealed.
The German federal government again reduced its economic prediction, as Habeck announced. For this year he expects stagnation and before 2026 with a growth of 1.0 percent, as can be seen in the spring project of the old government. Until now, 0.3 for 2025 and 1.1 percent had been calculated for the coming year.
American policy causes uncertainty
According to Habeck, after two years of recession in a row, the German economy is in a difficult fairway. The trade conflict with the US causes a lot of uncertainty. The EU committee must now negotiate with the government of Trump with confidence.
New government must tackle the subject
The German Ministry of Economic Affairs mainly expects impulses through public funds. In 2025, the expenditure of state consumption will probably increase by 2.1 percent, but the expenditure for private consumption is only 0.2 percent despite stabilizing inflation.
In Germany, the new government of the Union and SPD will have to tackle the shortage of trained employees and dissolve the investment arrears and guarantee greater digitization, Habeck said.
IMF also lowers the prediction
The International Monetary Fund (IMF) also reduced the prediction for Germany, and he now expects stagnation. The prediction was also adapted for Austria, and the IMF expects the domestic economy to shrink this year.
The global economy is brought to a “hard rehearsal”
The IMF has also reduced its prediction for the global economy. With 2.8 percent it should become considerably slower than predicted in January (minus 0.5 percentage points). The global economy is brought to a “hard test”, writes IMF chief host Pierre-Olivier Gourinchas with a view to commercial disputes. It is a “new era”, the global economic system will be adjusted.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
