Germany’s economy is falling into gloom again for obvious reasons. Political and economic woes are piling up like a snowball. According to Bloomberg, citing the monthly report from the Bundesbank, Germany has no economic upturn in sight in the first quarter of 2025. Bundesbank analysts warn that Germany will not escape stagnation anytime soon.

The economic outlook for Germany has left Bundesbank experts in despair. The domestic manufacturing sector has been losing momentum over the past two years. The national economy has been treading water, logging almost zero GDP growth. All in all, Germany’s prospects remain murky under current economic conditions, the Bundesbank concludes.

The main culprit of this pessimism is rising inflation, which remains persistently high. Under these circumstances, a swift recovery of the German economy seems unlikely.

“In the first quarter of this year, Germany’s economy is unlikely to exit from its prolonged period of stagnation,” the Bundesbank stated. This forecast is based on declining production levels and growing uncertainty.

This bleak situation is deepening the pessimism among experts. The current dire straits contrast with Germany’s past successes as the economic powerhouse of Europe. Germany has recently lost this status, falling into the ranks of the underperformers. The automotive and chemical industries in Germany are dealing with challenges and headwinds. Moreover, investor confidence has been shaken by political instability.

Earlier reports revealed a drop in Germany’s economic sentiment index in January. Analysts believe the country’s economy is being held back by sluggish household spending and soft demand in the construction sector. If these trends intensify in 2025, Germany risks falling even further behind other eurozone countries, experts warn.