Germany's Economic Forecast Takes a Dip Amid U.S. Tariff Concerns

Germany's economic forecast for this year has been reduced to 0.1% from the previously expected 0.8%, according to sources. The revision doesn't account for the latest U.S. tariffs, which could exacerbate the recession. A new fiscal package aims to improve the economic outlook through infrastructure investments.

Germany's economic outlook has been dealt a blow as forecasts for growth this year have been slashed to 0.1% from an earlier estimate of 0.8%. This adjustment, as revealed by sources, comes amidst concerns over new U.S. tariffs that have yet to be factored in.

For 2026, the projected economic growth stands slightly above 1.0%, a decline from the previous forecast of 1.3%. Germany's political landscape is shifting, with conservatives and Social Democrats eyeing a 500 billion euro fund to boost infrastructure, marking significant changes in borrowing rules.

The revised economic projections, influenced by U.S. tariffs on EU exports, will be published soon, while the economy ministry integrates these into its fiscal strategies to navigate future economic challenges.

(With inputs from agencies.)