Overview

• The German Council of Economic Experts has revised its 2025 GDP growth forecast to zero percent, citing prolonged economic stagnation.
• Key factors include bureaucratic hurdles, long approval processes, and unpredictable U.S. trade policies under President Trump, which have weakened exports.
• Unemployment is projected to rise to 6.2 percent in 2025, while inflation is expected to moderate to 2.1 percent, meeting European Central Bank targets.
• The Council stresses the importance of the €500 billion investment package but calls for strict legal guardrails to ensure funds are directed toward new public investments.
• Saxony's financial outlook diverges from the national trend, with increased state revenues offsetting municipal shortfalls, reflecting regional fiscal challenges.