FRANKFURT, Germany (AP) — Germany's troubled economy returned to modest growth last year after two years of falling output, official figures showed, as hopes rise that government spending on bridges, rail lines and defense may help end years of stagnation.
The expansion in gross domestic product of 0.2% for 2025 was fueled by stronger consumer and government spending while exports sagged under the weight of more restrictive U.S. trade policy under President Donald Trump, the German Federal Statistical Office said on Thursday.
That follows shrinkage of 0.5% in 2024 and 0.9% in 2023.
“Germany’s export business faced strong headwinds owing to higher U.S. tariffs, the appreciation of the euro and increased competition from China,” statistical office head Ruth Brand said in a statement accompanying the statistical release.
Expectations have risen for Germany to finally see stronger growth this year as the government under Chancellor Friedrich Merz implements plans to increase spending on infrastructure to make up for years of underinvestment. Meanwhile defense spending is rising due to a perceived higher level of threat from Russia after its invasion of Ukraine.
Germany has endured a period of extended stagnation following the COVID-19 pandemic. Higher energy costs following the war in Ukraine and increasing competition from China in key German specialties such as autos and industrial machinery have held back an economy that is heavily focused on exports. Then came Trump's imposition of higher tariffs, or import taxes, on goods from the European Union. The slow growth has also exposed long-term structural issues such as excessive bureaucracy and lack of skilled labor. A stronger euro has also made exports less competitive on price.
A group of leading economists has predicted 0.9% growth for this year but said that forecast could be at risk if the increase in government spending is unleashed more slowly than expected.
The German economy grew 0.2% in the last three months of 2025, according to available preliminary data.
FILE - Containers are piled up in the harbor in Hamburg, Germany, on Oct. 26, 2022. (AP Photo/Michael Probst, file)
The U.N. Security Council scheduled an emergency meeting Thursday to discuss Iran's deadly protests at the request of the United States, even as President Donald Trump left unclear what actions he would take against the Islamic state.
Tehran appeared to make conciliatory statements in an effort to defuse the situation after Trump threatened to take action to stop further killing of protesters, including the execution of anyone detained in Tehran’s bloody crackdown on nationwide protests.
Iran’s crackdown on the demonstrations has killed at least 2,615, the U.S.-based Human Rights Activists News Agency reported. The death toll exceeds any other round of protest or unrest in Iran in decades and recalls the chaos surrounding the country’s 1979 Islamic Revolution.
Iran closed its airspace to commercial flights for hours without explanation early Thursday and some personnel at a key U.S. military base in Qatar were advised to evacuate. The U.S. Embassy in Kuwait also ordered its personnel to “temporary halt” travel to the multiple military bases in the small Gulf Arab country.
Iran previously closed its airspace during the 12-day war against Israel in June.
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“We are against military intervention in Iran,” Turkish Foreign Minister Hakan Fidan told journalists in Istanbul on Thursday. “Iran must address its own internal problems… They must address their problems with the region and in global terms through diplomacy so that certain structural problems that cause economic problems can be addressed.”
Ankara and Tehran enjoy warm relations despite often holding divergent interests in the region.
Fidan said the unrest in Iran was rooted in economic conditions caused by sanctions, rather than ideological opposition to the government.
Iranians have been largely absent from an annual pilgrimage to Baghdad, Iraq, to commemorate the death of Imam Musa al-Kadhim, one of the twelve Shiite imams.
Many Iranian pilgrims typically make the journey every year for the annual religious rituals.
Streets across Baghdad were crowded with pilgrims Thursday. Most had arrived on foot from central and southern provinces of Iraq, heading toward the shrine of Imam al-Kadhim in the Kadhimiya district in northern Baghdad,
Adel Zaidan, who owns a hotel near the shrine, said the number of Iranian visitors this year compared to previous years was very small. Other residents agreed.
“This visit is different from previous ones. It lacks the large numbers of Iranian pilgrims, especially in terms of providing food and accommodation,” said Haider Al-Obaidi.
Europe’s largest airline group said Thursday it would halt night flights to and from Tel Aviv and Jordan's capital Amman for five days, citing security concerns as fears grow that unrest in Iran could spiral into wider regional violence.
Lufthansa — which operates Swiss, Austrian Airlines, Brussels Airlines and Eurowings — said flights would run only during daytime hours from Thursday through Monday “due to the current situation in the Middle East.” It said the change would ensure its staff — which includes unionized cabin crews and pilots -- would not be required to stay overnight in the region.
The airline group also said its planes would bypass Iranian and Iraqi airspace, key corridors for air travel between the Middle East and Asia.
Iran closed its airspace to commercial flights for several hours early Thursday without explanation.
A spokesperson for Israel’s Airport Authority, which oversees Tel Aviv’s Ben Gurion Airport, said the airport was operating as usual.
Iranian state media has denied claims that a young man arrested during Iran’s recent protests was condemned to death. The statement from Iran’s judicial authorities on Thursday contradicted what it said were “opposition media abroad” which claimed the young man had been quickly sentenced to death during a violent crackdown on anti-government protests in the country.
State television didn’t immediately give any details beyond his name, Erfan Soltani. Iranian judicial authorities said Soltani was being held in a detention facility outside of the capital. Alongside other protesters, he has been accused of “propaganda activities against the regime,” state media said.
New Zealand’s Foreign Minister Winston Peters said Thursday that his government was “appalled by the escalation of violence and repression” in Iran.
“We condemn the brutal crackdown being carried out by Iran’s security forces, including the killing of protesters,” Peters posted on X.
“Iranians have the right to peaceful protest, freedom of expression, and access to information – and that right is currently being brutally repressed,” he said.
Peters said his government had expressed serious concerns to the Iranian Embassy in Wellington.
A demonstrator lights a cigarette with a burning poster depicting Supreme Leader Ayatollah Ali Khamenei during a rally in support of Iran's anti-government protests, in Holon, Israel, Wednesday, Jan. 14, 2026. (AP Photo/Ohad Zwigenberg)
Protesters participate in a demonstration in support of the nationwide mass protests in Iran against the government, in Berlin, Germany, Wednesday, Jan. 14, 2026. (AP Photo/Ebrahim Noroozi)
Protesters participate in a demonstration in support of the nationwide mass protests in Iran against the government, in Berlin, Germany, Wednesday, Jan. 14, 2026. (AP Photo/Ebrahim Noroozi)
