According to the German government’s assessment, an economic upswing in Germany is not yet in sight.
The economic situation at the beginning of 2025 is still characterized by high uncertainties in both domestic and foreign policy, according to the monthly report of the Federal Ministry of Economics for March, which was published on Monday. The report highlights the significant impact of the unpredictable US trade policy and the prospects of the war in Ukraine on the global economy, as well as the uncertainty surrounding the implementation of financial policy proposals in the context of ongoing exploratory talks.
Although the production in the manufacturing sector showed a recovery in January, driven mainly by the automotive industry, no “fundamental trend reversal” in industrial production is expected, according to the ministry. Moreover, the anticipated boost in private consumption is not expected to materialize at the beginning of the year. The retail sector, following a weak holiday season, has only started the new year with a slight increase and new car registrations by private owners have seen a significant decline in February compared to the previous month.
Current early indicators, however, show an uneven sentiment in the German economy, with a trend developing towards a stabilization. According to the ministry, stabilizing expectations and increasing planning security for private households and the economy could arise from the proposals being discussed by the future government coalition.