May. 14, 2025 |
‘Unknown territory.’ On April 24, the German government revised its forecast for GDP growth this year from 0.3 percent down to 0.0, in order to account for the expected effects of U.S. President Donald Trump’s tariffs on Germany’s export-heavy economy. But the original forecast wasn’t exactly promising, either. And the German economy has been stagnant for years.
The country hasn’t seen significant growth in half a decade, since recovery from the pandemic. In 2024, Germany’s GDP contracted by 0.2 percent; in 2023, it shrank by 0.3 percent. Meanwhile, key sectors like the car industry have fallen behind their global competitors. Automakers in Germany produced 5.65 million cars in 2017 but only 4.1 million in 2023. Volkswagen, for instance, has slashed wages and has said it will lay off 35,000 workers by the end of the decade.
Germany used to be Europe’s economic powerhouse.
What happened?
—Gustav Jönsson
