AI Intelligence Summary
Germany is experiencing its longest industrial recession since reunification — four consecutive quarters of GDP contraction as of Q4 2025. The structural causes are deep: energy cost shock from Russia-Ukraine, Chinese competition in EVs and machinery, chronic underinvestment in digital infrastructure, and an ageing workforce. The ECB has cut to 2.65%, providing some relief, and the new coalition government has partially reformed the Schuldenbremse (debt brake) to allow defence and infrastructure spending. A shallow recovery is possible in 2026 but structural competitiveness challenges remain severe.
-0.50%
GDP Growth
2.30%
CPI Inflation
2.80%
Core CPI
6.10%
Unemployment
2.65%
Policy Rate
0.35%
Real Rate
65.20%
Debt/GDP
46.80
PMI
GDP Growth Rate
Annual real GDP growth (%)
Inflation (CPI)
Consumer price index annual change (%)
Monetary Policy Rate
Central bank benchmark rate (%)
Unemployment Rate
% of labour force unemployed
Full Indicator Dashboard
| Indicator | Value | Status |
|---|---|---|
| GDP Growth | -0.50% | contraction |
| Headline Inflation | 2.30% | target |
| Core Inflation | 2.80% | target |
| Unemployment Rate | 6.1% | moderate |
| Policy Rate | 2.65% | restrictive |
| Real Interest Rate | 0.35% | neutral |
| Yield Curve Spread | 0.24% | normal |
| Debt / GDP | 65.2% | elevated |
| Current Account | 4.80% | surplus |
| Fiscal Balance | -2.80% | deficit |
| PMI (Composite) | 46.8 | contraction |
| M2 Growth | 3.40% | slow |
| Industrial Production | -4.20% | declining |
| Trade Balance | $196.8B | surplus |
| FDI Inflows | $22.4B | strong |
| FX Reserves Coverage | 4.1 months | moderate |