Stay informed with free updates

Simply sign up to the German economy myFT Digest — delivered directly to your inbox.

Germany eked out 0.2 per cent growth in 2025 as Europe’s largest economy struggled to recover from an unprecedented period of stagnation.

The estimate is in line with the latest forecast from Germany’s central bank and follows two years of falling GDP.

Economists hope that Chancellor Friedrich Merz’s debt-funded investment spree will result in a higher growth rate this year as the government forks out billions of additional euros on infrastructure and defence.

The Bundesbank said in December that Germany had been “clearly in a recession since the end of 2022”, but dashed hopes of a quick recovery. It is forecasting 0.6 per cent growth this year, 0.1 percentage points lower than a previous estimate.

After rebounding from a sharp contraction during the Covid-19 pandemic, Germany’s economy then in effect stopped growing. Adjusted for inflation, production has hovered at levels last seen in 2019.

This is a developing story