German economists cut 2025 GDP growth forecast to near zero

 

"Germany's leading economic research institutes on Thursday cut their 2025 gross domestic product (GDP) growth forecast to near zero, warning that U.S. import tariffs would deepen the problems of Europe's largest economy, which is struggling.

 

The six think tanks now see GDP growth of just 0.1% in 2025 in their latest joint forecast, down from a 0.8% expansion forecast in September.

 

"Geopolitical tensions and protectionist U.S. trade policies are further worsening Germany's already strained economic situation," Torsten Schmidt, head of research at the RWI-Leibniz Institute for Economic Research, said during a presentation at the review.

 

The cut came a day after the French and Italian governments cut their growth forecasts for this year, citing new trade barriers, and Spain warned that its economic expansion would suffer, without giving specific figures.

 

German economists have calculated that US President Donald Trump's import tariffs on aluminum, steel and vehicles, which took effect in March and April, are likely to reduce German economic growth by 0.1 percentage points each in 2025 and 2026.

 

Additional “retaliatory” tariffs announced by the United States on April 2 could double that impact, but it is difficult to quantify, the institutes said.”

 

Commenting

 

“Germany is doing great without cheapRussian gas and without a competitive industry. Things will continue to improve with tariffs from the United States.”