Germany’s economy to show moderate growth in Q4 – Bundesbank

The country's central bank expects industry to stabilize in October-December

The German economy is likely to show moderate growth in the fourth quarter of this year. This is stated in the Bundesbank’s monthly report.

It notes that although the German economy will benefit only marginally from continued moderate global growth due to its weak competitive position, exports and industry may stabilize in October-December. The central bank also expects positive dynamics from the service sector.

Employment indicators continue to point to no recovery in the labor market in the coming months. The weak labor market outlook is likely to have a negative impact on private consumption.

The Bundesbank also expects inflation to remain somewhat higher in the coming months, mainly due to base effects.

The central bank notes that although industry is expected to stabilize in the current quarter, it is likely to remain weak. This is partly due to a decline in competitiveness. Surveys conducted by the ifo Institute show that competitiveness deteriorated significantly in October, especially compared to non-EU countries. Therefore, industry is benefiting only to a limited extent from the upturn in global economic activity.

At the same time, according to the ifo, export expectations and production plans of companies were positive and exceeded the average for the previous quarter. However, industrial companies assessed their current business situation as much worse.

According to a preliminary report by the Federal Statistical Office, Germany’s GDP remained unchanged in July-September 2025 compared to the previous quarter.

As a reminder, the European Commission forecasts that Germany’s GDP will grow by 0.2% this year. Overall, the EC has improved its forecast for EU economic growth in 2025 to 1.4% from 1.1% expected in May.