The German economy is set to grow marginally in 2025, followed by a 1% increase next year, according to the latest forecast by the Organization for Economic Co-operation and Development (OECD) released on Tuesday.
The 2026 figure was revised down by 0.1 percentage point from the OECD’s September outlook, as Europe’s biggest economy struggles to regain momentum following two consecutive years of recession in 2023 and 2024.
The OECD expects gross domestic product (GDP) to inch up by 0.3% this year, rising to 1% in 2026 and 1.5% in 2027.
“Private consumption will increase due to low inflation, rising nominal wages and decreasing domestic policy uncertainty,” the Paris-based organization said.
However, it expects continued uncertainty regarding trade policy and US tariffs to further weigh on demand for German exports as well as investment in export-oriented manufacturing.
Meanwhile, private investment is expected to pick up, “supported by high corporate savings, declining interest rates and lower domestic policy uncertainty.”
Across OECD countries as a whole, the organization projects GDP to grow by 3.2% this year.
Growth is set to slow to 2.9% in 2026 before climbing back to 3.1% in 2027.
“The global economy has proved more resilient than expected this year, supported by improved financial conditions, rising AI-related investment and trade, and macroeconomic policies,” the experts said.
However, they noted a slump in global trade in the second quarter of 2025, with higher tariffs expected to gradually translate into higher prices and slower growth.
