Germany's Economy Beats Expectations with Modest Q2 Growth
Germany's economy showed a modest but steady recovery in Q2 2025, growing 0.3% quarter-on-quarter compared to the previous quarter. This figure surpassed market expectations of 0.2%, with private consumption and net trade driving the growth.
The rebound in private consumption was a key contributor to the economy's expansion, while government spending also rose slightly. However, investment in construction and equipment remained weak, reflecting ongoing cautiousness among businesses amid high borrowing costs and geopolitical uncertainties.
The better-than-expected GDP figure may influence the European Central Bank's (ECB) policy decisions, with inflation easing but still above the 2% target. The ECB has been gradually reducing interest rates, and a stronger economy could give policymakers room to continue with gradual cuts.