The German government has sharply downgraded its economic outlook for 2025 and is now projecting zero growth.
According to the spring forecast announced Thursday by acting Economy Minister Robert Habeck, Europe's largest economy could stagnate or contract for a third consecutive year. This follows back-to-back declines in 2023 and 2024.
The latest revision marks a significant shift from the previous official forecast issued in the autumn of 2024, which projected growth of 1.1 percent. Habeck attributed the downgrade primarily to "Donald Trump's trade policies," saying the U.S. threat and imposition of tariffs have significantly heightened global economic uncertainty and dampened growth prospects.
Habeck emphasized that these unpredictable trade policies have once again posed serious challenges for Germany's export-reliant economy. He pointed to the country's integration into global supply chains and its openness to international trade.
Domestically, Habeck noted that economic conditions have begun to stabilize. A decline in political uncertainty could help spark a gradual recovery in private consumption, he said, adding, "The fiscal policy decisions of the incoming government may provide positive momentum, although their effects will likely only become noticeable in the coming years."
Germany has introduced an expansionary fiscal policy after amending its basic law to allow for increased public borrowing, including the creation of a 500-billion-euro infrastructure fund aimed at addressing long-standing public investment deficits.
But money alone won't solve the problem, Habeck warned, citing persistent structural challenges such as skilled labor shortages. He urged the next government to address these issues "quickly and decisively."
So far, in its coalition agreement, the incoming federal government has outlined a range of measures aimed at boosting the sluggish economy. These include corporate tax cuts, more flexible labor regulations, and the expansion of renewable energy.
According to the government projection, the German economy is expected to grow by 1 percent in 2026. (1 euro = 1.14 U.S. dollar)
Germany slashes 2025 growth forecast to zero amid US tariff fallout
Germany slashes 2025 growth forecast to zero amid US tariff fallout
The Iranian government is focusing on public concerns and maintaining stable supplies of essential goods amid recent protests, Iranian President Masoud Pezeshkian said in a televised interview on Sunday.
In the city of Karaj, northwest of the capital Tehran, daily life has largely continued as normal. A video filmed by a local resident on Sunday shows food stores open and grocery shelves fully stocked.
"This is the block near my home, and there are some food stores here. Daily life continues here. Last night we did not see many protests in Karaj. Right now the city is very safe. This is a grocery store close to my home. All the food is available; nothing is in shortage. Here are noodles and different types of beans. Here are dairy products, cheese, and yogurt. I also checked other grocery stores and didn't see any shortages. Everything is available," said local resident Ali Reza.
Iranian officials have described recent disturbances as acts orchestrated by the "enemy," including some carried out by well-trained and armed "terrorists." The incidents have caused casualties among security personnel and civilians, as well as property damage.
The Secretary of Iran's Supreme National Security Council Ali Larijani has directed authorities to severely punish the "terrorists."
Meanwhile, Iran's police chief Ahmad-Reza Radan said on Sunday that the police had raised alert levels and arrested several leaders of the troublemakers during the operations on Saturday.
President Pezeshkian noted in the interview that the normal demands of the Iranian people are reasonable and justified, but they must realize that triggering riots and carrying out terrorist acts are the enemy's attempts to undermine the country. He urged the public to remain vigilant.
Also on Sunday, Iranian Parliament Speaker Mohammad Baqer Qalibaf warned that Tehran would regard U.S. and Israeli bases and facilities in the Middle East as "legitimate targets" if Washington takes military action against Iran. His remarks followed media reports saying U.S. President Donald Trump is "seriously considering authorizing a strike" against Iran.
Iranian state media reported that at least 109 members of Iran's security forces have been killed in clashes since the protests began 14 days ago. Meanwhile, human rights groups based outside the country said the number of protesters killed has exceeded 200, though the figure could not be independently verified.
The protests initially erupted over a sharp depreciation of the rial and sweeping subsidy reforms. Iranian authorities have blamed the unrest on foreign-linked agents and sanctions imposed by the United States.
Iranian president says government focusing on ensuring supplies amid protests
