German economic forecast slashed to zero, outgoing minister blames Trump tariffs

Alsharq Tribune- World News 

Germany has cut its economic forecast from 0.3% of growth to zero for 2025, predicting a year of stagnation after a two-year recession.

“This is for mainly one reason, and it is Donald Trump’s trade policy,” Robert Habeck, Germany's outgoing economic minister, told a Berlin press conference on Thursday. He added that the German government had also lowered its prognosis for 2026 by 0.1% to an expected 1.0% of growth.

Earlier this week, the International Monetary Fund (IMF) slashed its global growth forecast from January, projecting that the German export-led economy would stagnate rather than achieve the modest 0.3% of growth announced at the start of the year.

The ministry’s projection is more closely aligned with the joint forecast by Germany’s leading economic research institutes, who foresee GDP growing by just 0.1%.

The economists attributed the bleak outlook to “geopolitical tensions” arising from the US administration’s volatile tariff policy and a loss of competitiveness in key markets such as China, where the German automotive sector has been losing ground to Chinese EV manufacturers. They also highlighted the negative impact of domestic “structural weaknesses,” such as the shortage of skilled workers and Germany’s high levels of bureaucracy.

At today's press conference in Berlin, Habeck explained that Germany's economy faced several significant threats.

“We depend on open and functioning markets, they are what made this country rich,” Habeck said, warning that an aggressive push of China into German markets could still “wreck our economy." He urged the incoming government coalition to reduce dependence on critical raw materials supplies and to prioritise close trade agreements with other global partners.

"Made in Germany is over," Habeck added, as he called for renewed progress on the integration of the European single market.