(21 May 2025)
RESTRICTIONS SUMMARY:
ASSOCIATED PRESS
Berlin, Germany – 21 May 2025
1. Wide of German government economic advisers posing for photographers
2. Tilt from report to Monika Schnitzer, head of German government panel of independent economic advisers
3. Wide of press conference
4. Close of Schnitzer speaking
5. SOUNDBITE (German) Monika Schnitzer, head of German government panel of independent economic advisers:
“In the next two years, the German economy will be shaped by two factors: US customs policy and the financial package that was recently passed. Donald Trump’s tariff policy is increasing uncertainty and endangering economic growth worldwide.”
6. Schnitzer speaking
7. SOUNDBITE (German) Monika Schnitzer, Head of German government panel of independent economic advisers:
“For Germany, we therefore expect growth of 0.0 percent this year with inflation of 2.1 percent. However, the financial package offers opportunities for modernizing the infrastructure in Germany and a return to a higher growth path. Next year, we therefore expect growth of 1.0% and inflation of 2.0%.”
8. Journalists taking notes
9. Wide of press conference
STORYLINE:
Germany’s economy will stagnate this year as the country faces headwinds from U.S. President Donald Trump’s tariffs and trade threats, the government’s panel of independent economic advisers said Wednesday.
Germany has Europe’s biggest economy, but hasn’t seen significant economic growth in five years and the gross domestic product shrank in each of the last two years.
The advisory panel, in its first forecast since new Chancellor Friedrich Merz’s government took office earlier this month, predicted the economy will stagnate this year and grow by 1% in 2026. Its previous forecast, in November, was for 0.4% growth this year.
The new outlook is in line with the forecast made a month ago by Germany’s last government.
Merz, who took office on May 6, has pledged to roll back bureaucracy, advance digitization, provide tax breaks for companies and promote more European trade agreements.
But she said that a huge investment package put together by Merz’s coalition “offers opportunities for a modernization of infrastructure in Germany and a return to a higher path of growth,” meaning a better outlook for next year.
Germany for years expanded exports and dominated world trade in engineered products such as industrial machinery and luxury cars.
But it has suffered from increasing competition from Chinese companies, along with many other factors, and Trump’s tariffs have added a further risk to German exports.
Last year, the United States was Germany’s biggest single trading partner for the first time since 2015, displacing China from the top spot as exports to the Asian power declined.
AP video by Pietro De Cristofaro
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