Germany’s economy grew 0.2% last year, the first time it has shown annual growth since 2022.
Europe’s largest economy has struggled with declines in its vital manufacturing sector; carmakers in particular have suffered in the face of Chinese competition and US tariffs, while a strong euro has hit exports. Chancellor Friedrich Merz loosened debt laws this year, freeing up cash to boost investment in infrastructure and defense; economists hope the spending spree will result in faster growth this year, but the Bundesbank forecast only a slow recovery.
Europe’s giants have floundered lately — France is also in the economic doldrums — while its traditionally weaker periphery countries, such as Greece, Portugal, and Spain, are faring better.
