Germany Faces Economic Stagnation Amid Fiscal Challenges and Tariff Uncertainties

The German Council of Economic Experts has downgraded its forecast for Germany, forecasting stagnation due to enduring industrial downturns and fiscal constraints. This marks a downward revision from its previous estimate of 0.4% growth.

Germany, the only stagnant economy among the G7 countries, faces heightened pressure from U.S. tariffs. Monika Schnitzer, the council's chairwoman, points to U.S. tariff policies and a domestic fiscal package as pivotal future factors.

Germany's strategic fiscal plan includes a 500-billion-euro infrastructure fund, expected to revive growth but only from next year. Inflation forecasts hover around 2%, influenced by trade conflicts and possible shifts in ECB monetary policy.

(With inputs from agencies.)