The Ministry of Economy and Climate Protection of Germany has published a monthly report on the national economy.
In the report, after the significant rise at the beginning of the year, the growth in the German economy shows a slightly weaker momentum in the second quarter, “Although there is a significant improvement in sensitivity indicators of the expectations of the business world, the latest data on economic development still draw a stagnant picture.” evaluated.
Despite the brighter business expectations, the report stated that industrial production and factory orders continue to watch wavy, and foreign trade, especially the US exports to the United States decreased after the expectations in the first quarter, has a reduction effect on growth.
In the report of the Ministry, it was stated that the economy in the country shows unbalanced development, and that the ongoing geopolitical uncertainties and the weak labor market reduce consumer confidence.
In the report, the recovery of the economy slowed down in the second quarter, one reason is that “the uncertainty regarding the US’s customs tariff policy continues.” shown.
German economy is difficult to grow
In the meantime, the German economy, in the first quarter of 2025, even though it has achieved a stronger growth than 0.4 percent than expected, the customs duty dispute between US President Donald Trump and the EU continues to cause uncertainty between companies and consumers.
Tariff wars and some of Trump’s statements fueled concerns about negative effects on global trade, while analysts see Trump’s customs duties policy as a “special risk” in the growth of the German economy.
The German economy, which is dependent on the manufacturing sector compared to other countries in the region, maintains its fragility due to its permanent weakness in production.
The economy fell 0.2 percent in 2024 compared to the previous year. Increasing competition with China and the braking of the economy of structural problems, the second year shrinkage took place.
The government reduced its growth expectation, which was previously announced as 0.3 percent for this year on April 24th, to zero with the influence of global commercial tensions after Trump’s policies.
