The German economy is expected to maintain its growth momentum thanks to a series of measures introduced by the federal government, but the U.S. tariff policy is significantly hindering its recovery, said Federal Minister for Economic Affairs and Energy Katherina Reiche on Wednesday.
The Federal Ministry for Economic Affairs and Energy of Germany stated in a report released on Wednesday that the country's economy is projected to grow by 0.2 percent this year, 1.3 percent next year, and 1.4 percent in 2027, driven by the special investments by the federal government and increased defense spending.
However, the current high energy and labor costs in Germany are not conductive to its recovery, while the U.S. tariff policies pose a particularly severe threat to the export-oriented German economy, the minister said at a press conference in Berlin.
"The high energy and labor costs in Germany, coupled with the appreciation of the euro, have affected the price competitiveness of German products. In addition, the high tariffs imposed by the United States have put pressure on global trade, disrupted existing supply chains, and hindered exports that are particularly important to Germany. We expect that the contribution of foreign trade to economic growth will be negative this year and in the next two years," said Reiche.
The minister said that the German government will make efforts to lower domestic electricity and gas prices and overcome various obstacles to economic recovery.
Noting that Germany ranks third from the bottom among members of the Organization for Economic Cooperation and Development (OECD) in terms of per capita working hours, Reiche said that Germany will modify its policies to increase people's working hours.
Germany expects economic growth amid U.S. tariff impacts
