Economic Key Facts Germany

With a gross domestic product of €4,305 billion in 2024, Germany is the world's third-largest economy after the United States and China and just ahead of Japan, making it the largest economy in Europe. However, India is expected to overtake Japan and Germany in the future. Exports of motor vehicles and motor vehicle parts, as well as chemical products, in particular, have made Germany the world's third-largest export nation to date. At 70%, the service sector contributes the largest share to the country's gross domestic product (GDP).

Data retrieved: 9 December 2025

Next year, the German economy is expected to grow noticeably again for the first time since 2022. However, the potential would be significantly greater if the federal government were to use the billions in new debt in a more targeted manner. These are the key findings of the annual report submitted to the government by the German Council of Economic Experts. The five council members, commonly known as the "economic wise men," warn against squandering opportunities for more growth.

According to their forecast, real gross domestic product will rise by +0.9% in 2026, after growing by only +0.2% this year. This would mean that the German economy would leave the phase of recession and stagnation behind. Economic output declined in 2023 and 2024.

A significant portion of the expected growth is attributable to additional government spending from the special fund for infrastructure, climate neutrality, and defense. According to calculations, these funds contribute around 0.3 percentage points to the forecast increase of +0.9%. A further 0.3 percentage points will come from the higher number of working days in 2026. Only about one-third of the growth will come from original activity in the private sector.

The mood among companies in Germany has deteriorated. The ifo Business Climate Index fell to 88.1 points in November 2025, down from 88.4 points in October. This was due to poorer expectations for the coming months. The current business situation, on the other hand, was assessed somewhat more positively.

The public expenditure ratio, which indicates the state's influence on an economy, is calculated as total government expenditure as a percentage of GDP. According to the International Monetary Fund (IMF), this amounted to 49.5% in Germany in 2024, which was above the average for the G7 countries of 46.1% and the public spending ratio of other major economies such as the United Kingdom (44.0%), the United States (37.6%), and China (32.9%).

According to the OECD, the share of taxes and social security contributions in total labor costs for average earners in Germany was 47.9% in 2024 for singles without children. This puts Germany in second-worst place among the 38 OECD member states after Belgium and well above the OECD average of 34.9%, which detracts from Germany's attractiveness as an investment location. The rate is also significantly lower in countries outside the EU, such as the United Kingdom (29.4%) and the United States (30.1%).

The latest forecasts by German economic research institutes and government organizations for GDP growth in Germany range between +/-0.0% and +0.3% for the 2025 calendar year and between +0.7% and +1.7% for the 2026 calendar year.

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Our CEO Outlook 2025, for which 1,350 CEOs of large companies around the world were surveyed, including 125 CEOs in Germany, also provides assessments of the economic situation, generative AI, ESG, and other current topics.

Our Future Readiness Monitor 2025, for which 570 top decision-makers in the German economy were surveyed, also provides an assessment of German companies with regard to their own future viability in the face of new opportunities and complex tasks, their investment plans, and their assessment of trends in the coming years.

German exports rose in October 2025, mainly due to higher demand from the EU internal market. They grew by +0.1% compared to the previous month of September 2025 to €131.3 billion. Compared to October 2024, exports even increased by +4.2%.

Conversely, goods worth €114.5 billion were imported – a decrease of -1.2% compared to the previous month of September 2025. The foreign trade balance thus closed with a surplus of +€16.9 billion.

A comparison within the year shows that imports in 2025 were higher than in the previous year in every month, whereas the volume of exports in 2025 was roughly the same as in 2024.

Most German exports in October 2025 were once again destined for the US. Goods worth €11.3 billion were delivered there, but this was 7.8% less than in September 2025. Compared with October 2024, Germany's exports to the world's largest economy were even 8.3% lower.

Real (price-adjusted) order intake in the manufacturing sector rose by +1.5% in October 2025 compared with September 2025, adjusted for seasonal and calendar effects. Excluding large orders, order intake was +0.5% higher than in the previous month. In the less volatile three-month comparison, incoming orders from August 2025 to October 2025 were 0.5% lower than in the previous three months.

A similar picture emerges in industrial production: real (price-adjusted) production in the manufacturing sector rose by +1.8% in October 2025 compared with September 2025, adjusted for seasonal and calendar effects. In the less volatile three-month comparison, however, production from August 2025 to October 2025 was down 1.5% compared to the previous three months.

Inflation in Germany remained unchanged in November 2025 compared with October 2025. Goods and services rose in price by an average of +2.3% compared with the same month last year.

Consumers recently benefited from cheaper energy, paying 0.1% less in October than a year earlier. However, prices remain high by international standards. While gas prices for households in Germany stood at 14 US cents/kWh in March 2025, they were just under 5 US cents in China and the US. Services rose by an average of +3.5%, while food prices rose by +1.2%.

The core inflation rate, i.e., the rate of inflation excluding energy and food prices, which are often very volatile, fell slightly to +2.7% in November 2025. This means that it has hardly changed in a year and a half—a strong indication of sustained price pressure above the ECB's target of 2%.

Current forecasts by German economic research institutes and government organizations on the development of the inflation rate in Germany indicate that the annual average for 2025 will be slightly lower than the current level. For the calendar year 2025, projections range between +2.0% and +2.3%:

The number of unemployed people in Germany fell by 25,700 to 2.885 million in November 2025 compared to October 2025. That is 111,000 more than in November 2024. The unemployment rate fell by -0.1 points to 6.1% compared to October 2025, but rose by +0.2 points compared to the previous year.

Structural challenges continue to have a noticeable dampening effect on the labor market. There is still a lack of momentum for a stronger recovery. Employment growth remains weak and demand for new employees is low. The situation on the training market is also tense. The proportion of applicants who receive a training place is at its lowest level in 25 years. While the number of applicants has risen, the number of apprenticeships on offer has fallen due to the economic downturn.

Whether in an Advent calendar or under the Christmas tree, anyone who wants to give chocolate as a gift will have to spend significantly more this year. Chocolate prices have risen at an above-average rate at the end of the year. In October 2025, consumers had to pay an average of 21.8% more for chocolate products than a year earlier.

Among these, chocolate bars cost 30.7% more and chocolate bars or other chocolate products cost 16.0% more than a year ago. Among other confectionery products (+5.0%), pralines in particular rose significantly by +22.1% compared to the same month last year, while prices for candies remained virtually unchanged (+0.4%) and chewing gum, gummy bears, and similar products fell by -2.8%. Prices for cookies rose by +1.7%.