Bundesbank Warns: Germany Faces Stagnation Until 2025 Due to Trump Tariffs

Germany is set to experience a three-year period without economic growth, according to a report by the Bundesbank. The central bank forecasts stagnation following two years of recession, primarily due to U.S. trade policies and uncertainty about future American actions. ‘The new U.S. tariffs and uncertainty regarding their future policy are initially limiting economic growth. This affects German industry during a time when it had begun to stabilize after a long period of weakness,’ stated Bundesbank President Joachim Nagel, warning exporters to prepare for tough times ahead. The German central bank anticipates a significant drop in exports this year due to U.S. trade policies, with slight improvement expected by 2026. Additionally, the appreciation of the euro against the dollar poses challenges for German exporters. Recovery is predicted to be delayed until substantial investment funds reach defense and infrastructure projects. GDP growth is forecasted at 0.7% for 2026 and 1.2% for 2027. On a positive note, inflation is slowing down more rapidly, with projections of 2.2% for this year and 1.5% for 2026.