Financial News: German Economy Expands On Domestic Demand

German Economy Expands On Domestic Demand

(RTTNews) - The German economy expanded in the fourth quarter, as initially estimated, as robust domestic demand helped to weather weaker exports amid global trade uncertainty.

Gross domestic product rose 0.3 percent after stagnating in the third quarter, final data from the Federal Statistical Office showed Wednesday. The rate aligned with the preliminary estimate published on January 30.

On a yearly basis, Germany's GDP growth improved to 0.4 percent in the fourth quarter, as estimated, from 0.3 percent in the preceding period.

The statistical office confirmed that the economy grew 0.2 percent in the year 2025 after contracting 0.5 percent in 2024.

"2025, a year of economic ups and downs, therefore ended with an increase in economic output", Federal Statistical Office President Ruth Brand said.

The positive development was primarily driven by household spending and government final consumption expenditure, Brand noted. There was also a substantial increase in gross fixed capital formation in construction, the official added.

On the expenditure side, household spending increased 0.5 percent and government expenditure increased more sharply by 1.1 percent in the fourth quarter.

Overall gross capital formation dropped 0.5 percent. However, construction investment rose significantly by 1.6 percent. Investment in machinery and equipment rose marginally by 0.1 percent.

Exports of goods and services were down 0.6 percent and imports of goods and services dropped 0.3 percent. As a result, the net trade made negative contribution to economic growth.

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