FRANKFURT, Feb. 19 (Xinhua) -- Germany's economy is expected to continue expanding in the first quarter (Q1) of 2026, though growth is likely to remain subdued, according to a report published on Thursday.
In its monthly report, the German central bank, the Bundesbank, said economic output would continue to grow following modest expansion in the final quarter of 2025, but momentum is expected to stay weak. It cited indicators suggesting that private consumption may not be able to sustain its previously elevated level.
Real gross domestic product rose by 0.3 percent quarter-on-quarter in the fourth quarter of 2025, resuming the upward trend that began at the end of 2024 after a temporary setback in the summer of 2025 linked to the impact of U.S. trade policy, according to official data and Bundesbank experts.
The report noted that early indicators point to a possible slowdown in private consumption.
Since the start of 2026, Germany's business sentiment has remained largely unchanged despite signs of improvement in manufacturing. According to the ifo Business Climate Index for January, manufacturing firms assessed their current business situation more positively, while sentiment in the services sector weakened, with declining order backlogs in logistics and a noticeable cooling in tourism.
The Bundesbank expects economic growth to gain momentum from the second quarter as planned government spending begins to feed through into the economy.
"From this spring onwards, the German economy is likely to grow more dynamically, driven mainly by fiscal stimulus," the Bundesbank said. ■