Germany's Economic Decline Linked to US Trade Policy

Germany’s economy is likely to shrink by 0.2 percent in 2025, according to a report from the German Economic Institute (IW). The report says Germany will fall behind compared to other major economies.

After two years of economic decline, challenges like US trade policies, global uncertainty and low investment are putting pressure on Germany’s economy, Chinese news agency Xinhua reported. While other big economies are showing signs of recovery this year, Germany is expected to stay in recession.

The report also says US trade policies are currently the biggest threat to the global economy. It predicts that global production could drop by 0.8 percent because of this. The economic slowdown may also affect the job market.

By the summer of 2025, unemployment in Germany could reach 3 million people. The institute has urged the new German government to act quickly and effectively to revive the economy and address long-term challenges.

Another recent report from Germany’s central bank also painted a more negative picture. While there was a small improvement in the first quarter, a recession is expected again in the second quarter.

Overall, the future of Germany’s economy remains uncertain and worrying.