German economists cut economic growth forecast to 0.1% for 2025 – Reuters

The revision does not take into account the new US reciprocal tariffs

German economic institutes have lowered their forecast for the country’s economic growth in 2025 to 0.1% from September’s expectations of 0.8%. Reuters reports, citing sources.

The new revision takes into account US tariffs of 25% on aluminum, steel and cars, but does not yet include reciprocal tariffs (20% for the EU) on other goods announced later.

Germany was the only G7 economy that did not grow over the past two years. The tariffs announced by Donald Trump will deal a serious blow to the country.

For 2026, the institutes forecast economic growth of just above 1% – the previous forecast was 1.3%.

After the German elections in February, the Conservatives and Social Democrats, who are negotiating to form a government, announced the creation of a €500 billion special fund for infrastructure development and drastic changes to borrowing rules to strengthen defense and restore growth. The fiscal package improves the economic outlook for 2026 and 2027.

According to the WVStahl industry association, Germany’s indirect steel exports (machine tools, tool parts, etc.) to the United States amount to 2.4 million tons. The country’s steel industry will thus suffer both from direct duties on steel and aluminum and from the secondary effect of tariffs on the automotive industry. Given the decline in steel demand, the new US measures could become a “crisis accelerator.”