Germany’s economy has entered a steeper-than-expected recession, with its GDP contracting by 0.3% in the second quarter. This is more severe than the initial estimate of a 0.1% decline. The main reason for this correction is the weakness in manufacturing sector, which was impacted by a surge in US businesses taking advantage of tariff-free exports at the start of the year.
The revised figure has increased pressure on Chancellor Friedrich Merz to deliver on his promise to revive economic growth.
Source: https://www.bloomberg.com/news/articles/2025-08-22/german-economy-shrank-more-than-estimated-in-second-quarter