Berlin (Reuters) – The German Council for Economic Experts revised down its raw domestic product forecasts (GDP) for Germany on Wednesday, now expecting the growth of the first European economy stagnating in 2025 due to a “pronounced weakness phase”.

The organization which advises the German government in matters of economic policy had planned growth of 0.4% this year in its previous forecasts, published in November.

Germany is the only member of the G7 not to have experienced growth over the past two years, due to budgetary constraints and a slowdown in industrial activity.

Customs duties announced by US President Donald Trump should also have a hard blow to an export -oriented economy.

“The German economy will be strongly influenced by two factors in the near future: American pricing policy and the budget package,” said Monika Schnitzer, president of the Board of Economic Experts.

The United States was Germany’s first trading partner in 2024, with bilateral trade in goods worth 253 billion euros.

Berlin approved in March a budgetary plan which includes a special fund of 500 billion euros for investments in infrastructure and largely exempted investments in the defense of rules limiting debt, decisions which, according to economists, offer possibilities for returning to growth.

The funds provided by the budgetary plan will give a positive impulse to investments in construction and equipment as well as to public spending from 2026, said the Council, which provides for a growth of 1% next year.

Private consumption should also experience slightly stronger growth in 2026 than in 2025, as available income should increase more significantly in real terms, the council added.

(Report Maria Martinez, Diana Mandia)

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