The German economy narrowly escaped recession in the third quarter, with GDP stagnating after a drop in the previous quarter, according to a first estimate published this Thursday, a sign that the country is struggling to emerge from two consecutive years of decline. Between July and September, the gross domestic product of Europe’s largest economy stagnated, according to the Destatis statistical office, while analysts on the Factset platform expected a timid rebound of 0.1%, after a revised fall of -0.2% in the second quarter.
According to initial estimates, investments in equipment evolved positively in the third quarter of 2025, while exports decreased compared to the previous quarter, Destatis detailed. Exports benefited at the beginning of the year from the anticipatory effects of US customs tariffs, before the surcharges imposed by Donald Trump on the EU, in force since the summer, paralyzed global trade.
“Lack of dynamism”
Conservative Chancellor Friedrich Merz has a significant budgetary effort to reactivate the economy, with a fund of several hundred billion euros destined to modernize defense and infrastructure, but whose effects should be felt on growth in 2026.
The German balance sheet looks all the more gloomy as the situation looks better in other eurozone countries, including France, where GDP rose by 0.5% during the summer quarter.
Another sign of stagnation in Germany came from the labor market: Germany’s unemployment rate remained unchanged at a seasonally adjusted 6.3% in October, a level stable since March, the Federal Employment Agency said on Thursday. In raw data, the number of unemployed fell by 44,000 in one month, to 2.91 million, below the threshold of 3 million. The agency, however, notes a “lack of dynamism” in the autumn recovery and a weakness in demand for new jobs. Leading indicators in Germany “barely suggest an improvement for the next one or two quarters,” added Jean-Oliver Niklasch.
Source: BFM TV
