German central bank predicts stagnation for 2025 #NewsGerman

The German central bank does not expect a noticeable upswing in the Germany economy this year and is looking to the new government to implement its structural programme rapidly, Bundesbank President Joachim Nagel said on Thursday

Nagel was speaking on the sidelines of the meeting of G7 finance ministers and central bank heads in the Canadian mountain resort of Banff.

“For 2025, we are expecting weak economic growth, which could be termed stagnation,” Nagel said.

He predicted anticipatory effects from US tariff policy would show in the first quarter. “Then the following quarters will turn out rather more weakly,” he said.

Calling for rapid implementation of the government’s plans, Nagel said: “Investment in infrastructure and technologies of the future are the key here to opening the door to more growth.”

The new government has outlined plans for up to €500 billion ($565 billion) in infrastructure spending.

Nagel was more positive on inflation. “We will reach our inflation target of 2% in the eurozone this year,” he said, terming this good news for the population and for business.

He said he was not concerned that the government’s economic programme would be inflationary, provided that it was focused on investment. It also contained elements that would reduce prices, for example on energy, he noted.

The programme would initially affect a relatively weak economy, and a boost could then possibly be seen in 2026, Nagel said.