German authorities cuts 2025 progress projection to 0.3%, Handelsblatt says

By Ludwig Burger

(Reuters) -The German authorities has slashed its progress projection for 2025 to 0.3% from 1.1%, the newspaper Handelsblatt cited authorities sources as saying on Friday, because the financial system exhibits little signal of recovering from two years of contraction.

The Financial system Ministry declined to remark.

Final 12 months, Germany’s financial system shrank for the second consecutive 12 months, burdened by competitors from overseas, excessive vitality prices, still-elevated rates of interest and unsure enterprise prospects.

The German financial system, Europe’s largest, shrank by 0.2% over the complete 12 months, official statistics confirmed final week.

Disagreements over methods to reinvigorate the financial system have been a predominant issue behind the collapse of German Chancellor Olaf Scholz’s fractious three-party coalition final 12 months.

The financial system exhibits up as the highest concern of German voters in surveys forward of a nationwide election on Feb. 23.

The earlier prediction in October of 1.1% progress by the Financial system Ministry, led by Deputy Chancellor Robert Habeck of the Inexperienced occasion, had already been thrown into doubt.

In December, Germany’s three main financial forecasters predicted progress charges between zero and 0.4% for 2025, within the absence of swift structural countermeasures.

Handelsblatt additionally mentioned that the German authorities had lowered its 2026 progress projection to barely greater than 1% from 1.6%.