The German economy contracted for the second year in a row, remaining the weakest among the eurozone countries. According to the Federal Statistical Office, the country's GDP decreased by 0.2% in 2024, and in the last quarter of the year the decrease was 0.1%. The latest data coincided with analysts' forecasts. Export-oriented Germany faced low global demand and increasing competition from China, which led to a 0.8% decline in exports compared to the previous year. The recession may continue in winter. The German Economy Ministry has warned that if another decline in GDP is recorded in the first quarter of 2025, the country will find itself in a technical recession — defined as two consecutive quarters of economic decline. The prospects for recovery remain dim. The Ministry noted that clarity in global economic, financial and geopolitical conditions is needed to significantly improve the situation. Forecasts for global industry and German trade remain weak. Inflation may slow down by the end of 2025. As the next year progresses, factors such as restrained price growth, restrictive monetary policy, and more moderate wage agreements are expected to help reduce inflationary pressures.
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