Germany’s economy recorded no growth qoq in Q3 2025, in line with the preliminary estimate and following a 0.2% contraction in Q2. Modest improvements in gross fixed capital formation (0.3% vs -1.1% in Q2), mainly driven by equipment and other facilities, alongside stronger government spending (0.8% vs 0.2%) and a positive contribution from inventories, helped offset weaknesses elsewhere. Private consumption fell (-0.3% vs 0.1%), while net trade subtracted 0.3 ppts as exports shrank (-0.7% vs 0.3%) amid U.S. tariffs and imports stalled (vs -0.2%). By sector, declines in manufacturing and construction were balanced by gains in trade, transport, hospitality, information and communication, and financial and insurance services. On an annual basis, GDP grew 0.3%, unchanged from the previous two quarters. Looking ahead, GDP growth is projected at 1.3% for 2026 and 1.4% for 2027, supported by higher public spending, likely helped by special infrastructure funds and increased defense outlays.

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