In the fourth quarter of 2024, Germany's Gross Domestic Product (GDP) decreased by 0.2 percent compared to the previous quarter, primarily due to a decline in exports.

This decline in GDP also reflects a 0.2 percent shrinkage compared to the same quarter the previous year, confirming earlier estimates from January 2025.

Despite the overall downturn, private consumption rose slightly by 0.1 percent, supported by strong wage growth, although worsening labor market prospects are increasing consumer insecurity.

Government spending surged by 4 percent compared to 2023, driven by increased expenditures on health, medications, and additional support for youth.

Annual data indicates that household consumption increased by 0.3 percent, attributed to higher spending on health and non-durable goods such as food and fuel.

Factors contributing to the economic downturn include increased foreign competition, high energy costs, elevated interest rates, and uncertain economic prospects.

Investment trends were mixed, with a fifth consecutive quarter of decline in machinery and equipment expenditures, although construction investments increased due to mild weather.

Concerns remain particularly focused on the automotive sector and energy-intensive industries, which have seen sharp declines in production.

The manufacturing sector continues to struggle, with a 0.6 percent decline in economic output over seven consecutive quarters, particularly affecting the automotive and machinery industries.

The central bank indicates that despite potential growth, the overall trend shows the economy is still trapped in stagnation.

Economic associations are urging the new government to implement measures such as lowering energy prices, reducing taxes, and easing bureaucratic burdens to stimulate growth.

Internationally, Germany's economic performance lagged behind other regions, with the Eurozone GDP rising by 0.9 percent, the EU by 1.1 percent, and the USA by 2.5 percent during the same period.