Preliminary data published by the Federal Statistical Office (Destatis) showed that in the 1st quarter, GDP increased by 0.2% after decreasing by 0.2% in the 4th quarter. The latest change coincided with the forecasts of experts. The rebound was supported by easing inflation and lower borrowing costs, which helped boost domestic demand. The Destatis attributed the quarterly increase to the fact that both household final consumption expenditure and capital formation were higher than in the previous quarter.”
In annual terms, GDP fell by 0.2% in the 1st quarter, as expected, after a similar decline in the 4th quarter. Detailed results for the first quarter of 2025 will be released by the Destatis on 23 May.
Last week, the German government lowered its GDP growth forecast for 2025 to 0.0% from 0.3%, pointing out that global trade uncertainty could negatively affect economic growth and limit investment. For 2026, the government now expects growth of 1%, down slightly from its January forecast of 1.1%. Earlier this month, German economic institutes cut their growth forecast for this year to 0.1% from the 0.8% expected in September, taking into consideration initial U.S. tariffs on steel, aluminium and cars.