BERLIN, May 21 (Xinhua) -- Key German economic advisers have downgraded their growth forecast for 2025 to zero from the previous projection of 0.4 percent in a report released Wednesday.
The report by the German Council of Economic Experts has reflected the ongoing struggles of the country's economy, which has been battered by two consecutive years of recession.
The report highlights that the German economy remains in a prolonged period of weakness. Bureaucratic hurdles and lengthy approval processes are slowing overall economic growth, while structural changes are accelerating, affecting sectors and regions that have thus far been economically strong.
The report also notes that U.S. President Donald Trump's trade policy is posing a risk to global economic growth. However, the Council underlines that the financial package introduced by the newly-formed German government presents opportunities for infrastructure modernization and a potential return to higher growth rates.
"In the near future, the German economy will be significantly influenced by two factors: U.S. trade policy and the financial package," said Monika Schnitzer, chairwoman of the Council of Economic Experts.
U.S. tariff policies are placing additional strain on Germany's already struggling export industry, she added, and German exports are likely to decline even further with the sharp and unpredictable rise in tariffs.
From 2026 onwards, the report forecasts that funds from the German government's financial package will boost investment in construction, equipment, and government consumption. Meanwhile, private consumption is expected to grow slightly faster than in 2025, driven by stronger growth in price-adjusted disposable incomes.
The Council's downward revision of the growth forecast follows the German government's reduction of its 2025 forecast to zero growth in April. For 2026, both the government and the Council are predicting 1 percent growth.
Once a leader in the European economy, Germany has now faced two years of recession, with inflation, high energy prices, and falling exports weighing heavily on businesses.
Established in 1963, the five-member German Council of Economic Experts, commonly known as the "Five Sages," is an academic body that advises the German government on economic policy. ■
