The Bundesbank expects only weak growth in the German economy at around 0.4% in 2025. Growth could be even weaker if US President-elect Donald Trump imposes sweeping tariffs on the scale he has announced.
The president of the German central bank, Joachim Nagel, spoke in favor of reforming the law on the debt brake, given the weak prospects of the German economy. TASR informs about it based on the report of the DPA agency.
The constitutional law on the debt brake limits Germany’s public deficit to 0.35% of gross domestic product (GDP), which many critics describe as a drag on the growth of Europe’s largest economy.
For example, a distinction between government consumption spending and investment could be considered “to create more room for maneuver for structural investment,” Nagel said in an interview published by the Financial Times on Wednesday.
According to him, the German economy is currently in a more difficult situation than at the beginning of the 21st century. Unemployment was much higher at the time, but “there was no geopolitical fragmentation and global trade was growing strongly,” Nagel said.
The Bundesbank expects only weak growth in the German economy at around 0.4% in 2025. Growth could be even weaker if US President-elect Donald Trump imposes sweeping tariffs on the scale he has announced, Nagel warned.
“If more tariff increases are added to current forecasts, the economy could stagnate for even longer,” said Nagel, who is also a member of the Governing Council of the European Central Bank (ECB).
