However, they pointed to uncertainty surrounding the Trump administration's trade policy. U.S. tariffs on aluminum, steel and vehicle imports are likely to reduce German economic growth this year and next by 0.1 percentage points each, an effect that the new forecast already takes into account, according to their report.
The sweeping tariffs announced last week by President Donald Trump and then largely put on hold could double that hit to gross domestic product, the economists said. But they added that "the specific effects are difficult to quantify, as tariff rates have never been raised so sharply in the world's current globalized economy."
Germany's prospective new government, which hopes to take office next month after months of political drift in the country, aims to revitalize the economy. Friedrich Merz, the likely next chancellor, and his would-be allies presented their coalition agreement on Wednesday.
Credit: AP
Credit: AP
Credit: AP
Credit: AP