Germany's Economic Performance in Q2 2025

In a recent preliminary report by Destatis, it was revealed that the German economy experienced a marginal contraction in the second quarter of 2025. The gross domestic product (GDP) saw a decrease of 0.1% compared to the previous quarter, aligning with analysts' expectations. However, on a yearly basis, the GDP managed to grow by 0.4%, offering a silver lining amidst the quarterly decline.

Key Factors Behind the Economic Contraction

The report highlighted a decline in gross fixed capital formation, particularly in machinery and equipment, as well as in construction, during the second quarter. This downturn contrasts with the positive trends observed in household and government final consumption expenditure, which saw an increase after adjustments for price, seasonal, and calendar variations.