Berlin (Reuters) – Gross domestic product (GDP) of Germany contracted 0.3% in the second quarter of 2025 compared to previous data published Friday by the Federal Statistics Office, while the demand for its main trading partner, the United States, has slowed down after several months of anticipated purchases in anticipation of customs duties.
A first reading had given a decline of 0.1% of GDP for the period.
“It seems increasingly improbable that a substantial recovery materializes before 2026,” said Carsten Brzeski, a global macroeconomics manager at ING.
Industrial production, in particular, has recorded less good results than initially planned, said the Statistics Office.
Household consumption in the second quarter has been revised downwards, with an increase of 0.1%, due to new information available on the services sectors, such as monthly statistics for accommodation and catering services for the month of June.
Public spending increased by 0.8% compared to the previous quarter, said the Statistics Office. Investments have decreased considerably in the second quarter, backing by 1.4%.
Foreign trade has also not made a positive contribution. In the second quarter, total exports of goods and services fell 0.1% compared to the previous quarter.
The EU and the United States have concluded a trade agreement on trade at the end of July, but only the basic rate of 15% has been implemented so far. The EU is still waiting for the White House to publish presidential decrees to cover exceptions, especially in the automotive sector.
The United States was Germany’s first trading partner in 2024, with bilateral trade in goods amounting to 253 billion euros.
The private sector nevertheless experienced a slight recovery in growth in August, driven by the manufacturing sector, which recorded an increase in new orders, according to the composite index of the HCOB Flash Germany purchasing directors published Thursday.
The German economy is expected to recover in the coming quarters thanks to interest rate reductions in the European Central Bank and a significantly more expansionist fiscal policy, Ralph Solveen, senior economist at the Commerzbank said.
“However, this recovery should be moderate due to the structural problems of the German economy and the significant increase in American customs duties,” added Ralph Solveen.
(Written by Rachel More, Blandine Hénault and Noémie Naudin, edited by Augustin Turpin)
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