Europe’s Largest Economy Returns to Growth After Two Years of Contraction

Germany's gross domestic product grew by 0.2 percent in 2025, matching the government's forecast, according to data released by Destatis, the country's national statistical office.

Photo: flickr by Луис Хавьер Модино Мартинес, https://creativecommons.org/licenses/by/2.0/

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Quarterly and Annual Performance

In the fourth quarter alone, the economy expanded by 0.3 percent compared with the third quarter and by 0.4 percent on an annual basis. In the previous two years, Germany's economy contracted by 0.9 percent in 2023 and 0.5 percent in 2024, suggesting that the country has begun a gradual recovery from its downturn.

The positive dynamics in 2025 were driven primarily by final household consumption expenditures, government spending, and gross capital formation in construction.

Growth Outlook Improves

According to estimates by the International Monetary Fund, Germany's GDP growth this year could reach between 1.1 and 1.5 percent. Should the upper end of that range materialize, Europe's largest economy would fully offset the declines recorded in recent years.

Russia's Economic Indicators

Russia's GDP grew by one percent in 2025, according to the preliminary estimate by Rosstat. The Bank of Russia, in a forecast published on February 13, projected economic growth of 1-2 percent in 2026. Analysts at the VEB Institute expect growth for the current year to reach approximately 0.8 percent.