German GDP grows slightly in 2025

After two years of recession, the German economy grew slightly again in 2025. According to initial calculations by the Federal Statistical Office, price-adjusted gross domestic product (GDP) rose by 0.2% compared to the previous year. Adjusted for calendar effects, the increase amounted to 0.3 %. The main drivers were increased consumer spending by private households and the state.

In contrast, exports fell again. The export industry suffered from higher US tariffs, the appreciation of the euro and growing competition from China. Investment also remained weak - both in equipment and in the construction industry.

Ruth Brand, President of the Federal Statistical Office

Gross value added: Declines in industry and construction, mixed picture in the service sector

• Manufacturing industry: down 1.3%; automotive industry, mechanical engineering and chemicals particularly affected.
• Construction: Down 3.6%, driven by high construction prices; civil engineering slightly above previous year.
• Services: Mixed - business service providers (-0.8 %), other services (-0.3 %), trade/transport/hospitality (+1.2 %), public service providers/education/health (+1.4 %).

Consumption and government spending support growth

• Private consumer spending: +1.4 %, in particular health (+3.8 %) and mobility (+2.7 %).
• Government consumption: +1.5%, primarily higher spending on social security, healthcare and employee compensation.

Investments and foreign trade

• Gross fixed capital formation: -0.5 %; construction investment -0.9 %, equipment -2.3 %.
• Exports: -0.3 %; core areas such as motor vehicles and machinery in decline.
• Imports: +3.6%, in particular machinery, electrical equipment, pharmaceutical products and food.

Labor market stagnates

The number of people in employment was 46.0 million, almost unchanged from the previous year. Growth occurred exclusively in the service sector, while industry and construction again recorded declines in employment.

Government finances improve slightly

• Financing deficit 2025: €107 billion (-8 billion compared to 2024), deficit ratio 2.4% of GDP.
• Government share: 50.3%, back above 50% for the first time since 2020

Outlook for the 4th quarter of 2025

According to preliminary estimates, GDP grew by 0.2% in the 4th quarter of 2025 compared to the previous quarter, adjusted for price, seasonal and calendar effects. The detailed quarterly accounts will follow on January 30, 2026 and the comprehensive national accounts on February 25, 2026.