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Investing.com -- Germany’s economy is expected to grow at a slower pace than previously forecast, according to the Ifo Institute’s quarterly report released Thursday.
The Ifo Institute lowered its growth projection for Europe’s largest economy to 0.2% for 2025, down from its earlier forecast of 0.3%. The outlook for 2026 was also reduced to 1.3% from the previous estimate of 1.5%.
Timo Wollmershaeuser, head of forecasts at Ifo, pointed to U.S. tariffs as a key factor still having a "noticeable impact" on the German economy.
"Solely the uncertainty associated with the previous tariff dispute is likely to gradually recede, which will support the economy," Wollmershaeuser said.
The downward revision comes despite the German government’s planned fiscal loosening, which economists say will provide less economic stimulus than initially anticipated.
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