This article explains Germany's Q2 2025 real GDP growth rate announced by the Federal Statistical Office on August 22.
Second Quarter Economic Growth Rate
Germany's seasonally and calendar-adjusted real GDP for Q2 2025 (April-June) decreased by 0.1% compared to the previous quarter, marking negative growth for the first time in two quarters. The main factor was a 0.2% decrease in exports from the previous quarter, significantly impacting the export-dependent German economy.
GDP Component Breakdown
Final Consumption Expenditure increased by 0.2% from the previous quarter, maintaining steady domestic demand. Gross Fixed Capital Formation showed contrasting movements: construction investment decreased by 2.0%, while equipment investment increased by 1.1%.
Trade Balance deteriorated with exports decreasing by 0.2% and imports increasing by 0.2%, resulting in a negative contribution to GDP growth.
Annual Growth Rate Performance
On a year-over-year basis, Q2 2025 real GDP grew by 0.3%, decelerating from Q1's 0.9% growth. Calendar-adjusted annual growth was negative 0.1%, marking the first negative growth in five quarters.
Historical Data Revisions
The Federal Statistical Office conducted comprehensive revisions of economic data from Q1 2020 to Q1 2025. Notable changes include:
- 2023 real GDP growth revised down from 0.2% to negative 0.2%
- 2024 growth revised down from 0.2% to negative 0.3%
These downward revisions indicate that the German economy has been weaker than initially estimated over the past two years.
Economic Outlook
The article notes that Germany's economic recovery remains sluggish, with particular weakness in the manufacturing sector continuing. The combination of export decline and weak construction investment suggests ongoing challenges for Europe's largest economy, requiring careful monitoring of future economic indicators.