The outgoing German government expects the country's economy to experience stagnation in 2025, which would be the first time in history the German economy would not grow for three consecutive years, Handelsblatt reported on Tuesday, citing government sources. In January, the government projected a growth rate of 0.3%.

As for 2026, the government forecasts the gross domestic product (GDP) to grow around 1%, 0.1 percentage points lower than previously projected.

According to the sources, the new forecast is mainly attributed to the tariffs announced by United States President Donald Trump and his unpredictable trade policies, which prompted German companies to postpone their investments due to the uncertainty.