Germany's economy is set to contract by 0.2% this year and slip into recesssion for a third consecutive year, according to a new forecast by the Cologne-based German Economic Institute (IW).
The country is particularly affected by the ongoing trade conflict triggered by the US government's tariffs, the IW noted.
Global uncertainties that are discouraging businesses from making investments are contributing to the downturn, with declines in major purchases such as new machinery and vehicles, it said.
High operating costs in Germany further complicate the situation, according to the IW.
Germany has seen two consecutive years of recession, with gross domestic product (GDP) having shrunk by 0.2% in 2024.
