The Council of Experts warns: The German economy will not restart in 2025 either.

BerlinThe German locomotive still hasn't started. five wise men, as the Council of Economic Experts, which independently advises the German government, is known, has revised its forecasts for the German economy downwards. The experts warn that Germany is going through a "phase of pronounced weakness" and predict that Europe's largest economy will stagnate this year due to the trade war and grow by 1% in 2026. This same organization had predicted growth of 0.4% for this year in its previous forecasts published in November.

Inflation, according to these advisors to the German government, will stand at 2.1% this year and 2.0% next year, according to the forecasts in their spring 2025 report. "In the near future, the German economy will be significantly influenced by two factors: the trade policy of the United States," warned Monika Schnitzer, president of the Council of Economic Experts, at a press conference in Berlin.

The five wise men They believe that US President Donald Trump's trade policy is jeopardizing global economic growth and placing "an additional burden on already weak German exports." "With a sharp and unpredictable increase in tariffs, German exports are likely to decline further," the experts warn.

The Council of Economic Experts urges "to seize the opportunities of the fiscal package and avoid the risks." "The fiscal package offers opportunities if the funds are primarily used for investment. This could compensate for past missed investments and put Germany back on the path of growth. Diversions from the core budget and the financing of already planned investments must be avoided through institutional precautions," they warn.

In March, the German government approved a fiscal plan that includes an extraordinary fund of 500 billion euros for infrastructure investments and exempts military spending that exceeds 1% of gross domestic product (GDP) from the debt brake. With this plan, the coalition government of conservatives and social democrats hopes to boost investment and revive the battered German economy, which is facing its third year without growth.

Economists expect fiscal policy boosts from the new German government, which explains the expectation that the German economy will return to growth next year. five wise men In their report, they recommend accelerating the reduction of bureaucracy, further digitalizing public administration, and easing the burden on businesses in all areas.

Automotive and chemical industries are the most affected.

They also believe it is necessary for the government to support structural change. "Regions with a high degree of specialization in knowledge-intensive manufacturing, such as the automotive and chemical industries, will be particularly affected," the report warns.

The experts explain that the government's economic policy should support the adjustment through "measures that promote growth in general and specific measures that develop new prospects for particularly affected regions." five wise men They also recommend implementing training or retraining programs for affected workers to support their transition to new professional activities, especially in regions that could experience high unemployment in the short term.