Summary

Germany’s Bundesbank reduced its 2025 and 2026 GDP growth forecasts to 0.2% and 0.8%, respectively, from previous estimates of 1.1% and 1.4%. It also predicts a 0.2% economic decline in 2024.

Persistent headwinds, structural issues, weak exports, and declining industrial activity are driving the downturn.

Exports fell 2.8% in October, their sharpest drop this year, with future recovery uncertain amid fears of rising global protectionism.

Bundesbank President Joachim Nagel also noted labor market concerns dampening private consumption.