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ABN Amro Sees Germany's GDP Expanding by 0.9% This Year But Downside Risks Are Mounting

BY MT Newswires | ECONOMIC | 01/22/26 10:11 AM EST

10:11 AM EST, 01/22/2026 (MT Newswires) -- After two years of recession, the German economy returned to growth in 2025, though the expansion was modest at just 0.3%, said ABN Amro.

Destatis' preliminary estimate for Q4 growth stood at 0.2% quarter over quarter, close to the bank's forecast of 0.25%.

This slight improvement in growth sets the stage for 2026, a year anticipated to see higher quarterly growth rates driven by increased government investment and defense spending, rising consumer real incomes, and past interest rate cuts supporting domestic demand, stated ABN Amro.

The bank forecasts annual growth for this year to reach 0.9%.

However, downside risks have risen, from delays in fiscal spending and renewed tariff threats. Without structural reforms, any growth stimulus will likely be temporary, and prospects for long-term economic improvement will remain elusive, added ABN Amro.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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