June 12, 2025--The ifo Institute has revised its economic forecast for Germany upward. The German economy is expected to grow by 0.3 percent in 2025 and 1.5 percent in 2026. Compared to the spring forecast, the growth rates have been raised by 0.1 and 0.7 percentage points respectively. "The crisis in the German economy reached its low point in the winter half-year," says Timo Wollmershäuser, Head of Forecasts at ifo.

Economic output already rose sharply by 0.4 percent in the first quarter of 2025. According to the ifo Institute, this was mainly due to exports to the US being brought forward. Private consumption and investment did, however, also increase again. At the same time, sentiment among companies had brightened since the start of the year. "The growing optimism is probably also being fueled by the hope that the new coalition will end the economic stagnation, and an agreement will be reached in the trade dispute with the US," says Wollmershäuser.

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