Germany's Economics Minister Robert Habeck announced on Wednesday a downward revision of the government's growth forecasts for Germany's GDP in 2025, as the Ministry of Economics lowered its growth forecast by 0.8% to 0.3%, compared to 1.1% in the previous forecast report.
In a conference held to announce the economic forecast cuts, Habeck warned that the German economy has entered a "difficult position" at the beginning of the year, indicating that it has already been stagnant for a long time.
Habeck attributed the weaker performance of Germany's economy to a lack of labor and skilled workers, along with excessive bureaucracy, as well as a shortage of investment, both private and public, explaining that all of this has had negative effects on the German economy.
However, Habeck added that despite the current economic conditions, "there is still light at the end of the tunnel," as he stated that the German government expects economic growth of 1.1% in 2026.
The more pessimistic forecasts from the Ministry of Economics come after preliminary data showed a contraction in Germany's GDP of 0.1% in 2025, marking the second consecutive annual contraction for the largest economy in the Eurozone.
In comparison, the German Federal Bank expected in December that the German economy would achieve a growth rate of only 0.2% in 2025, pointing to ongoing adverse economic winds as well as significant structural problems.
