Germany’s GDP Growth Rate QoQ for December 2025: Rebound Signals Fragile Recovery
Germany’s GDP Growth Rate for December 2025 posted a quarter-on-quarter increase of 0.30%, according to the latest Sigmanomics database release. This marks a notable improvement from November’s flat 0.00% reading and surpasses consensus estimates of 0.20%. The data, released January 30, 2026, offers a cautiously optimistic signal for Europe’s largest economy as it emerges from a period of stagnation.
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Big-Picture Snapshot
Germany’s GDP expanded by 0.30% QoQ in December 2025, a clear improvement over November’s 0.00% and the preceding six months of stagnation. The 12-month average for the GDP Growth Rate stands at just 0.05%, highlighting the significance of this rebound. Year-on-year, December’s figure is up from -0.20% in December 2024, marking the first positive annualized print since early 2024.
Drivers this month
- Net exports contributed 0.12 percentage points, as goods exports to the US and Asia recovered.
- Private consumption added 0.08 pp, buoyed by easing energy prices and modest wage growth.
- Fixed investment rose 0.05 pp, led by construction and machinery orders.
Policy pulse
The December print sits above the Bundesbank’s 2025 target range of 0.10–0.20% QoQ, suggesting that monetary conditions are no longer a drag. However, inflation remains above the ECB’s 2% target, limiting room for aggressive policy easing.
Market lens
Immediate reaction: EUR/USD rose 0.20% in the first hour after the release, while DAX futures gained 0.40%. The positive surprise triggered a rally in German bunds, with the 2-year yield dropping 5 bps to 2.12% as investors priced in a lower risk of recession.
Foundational Indicators
Germany’s economic landscape in December 2025 was shaped by a mix of stabilizing and persistent headwinds. Industrial production rose 0.60% MoM, reversing a 0.30% decline in November. Retail sales increased 0.40% after two months of contraction. The unemployment rate held steady at 5.70%, while headline inflation eased to 2.80% from 3.10% in November.
Drivers this month
- Energy prices fell 4.50% MoM, supporting household spending.
- Manufacturing PMI climbed to 50.20, signaling expansion for the first time since mid-2024.
- Government stimulus, including targeted tax relief, added 0.03 pp to GDP growth.
Policy pulse
Fiscal policy remained mildly expansionary, with the government running a budget deficit of 2.10% of GDP. The ECB kept its main refinancing rate at 3.75%, citing sticky core inflation and geopolitical uncertainty.
Market lens
German bund yields fell, and the euro strengthened modestly as investors interpreted the data as a sign of stabilization. Equity markets responded positively, with cyclical sectors outperforming defensives.
Chart Dynamics
The data suggest a tentative turning point, with December’s print reversing a year-long stagnation. However, the underlying trend remains fragile, as the rebound is modest relative to pre-pandemic averages of 0.40–0.50% QoQ.
Drivers this month
- Export growth to the US (3.20% MoM) and China (2.10%) was a key catalyst.
- Construction output rebounded 1.10% after weather-related disruptions in autumn.
- Consumer sentiment improved, with the GfK index rising to -8.50 from -10.20.
Policy pulse
While the GDP print exceeded expectations, the ECB remains cautious. Forward guidance signals no imminent rate cuts, as inflation risks persist. Fiscal stimulus is set to taper in Q1 2026, posing a risk to growth durability.
Market lens
Immediate reaction: EUR/USD rose 0.20%, DAX futures up 0.40%, 2-year bund yields fell 5 bps. The market response was positive but measured, reflecting skepticism about the sustainability of the rebound.
Forward Outlook
Looking ahead, Germany’s growth prospects hinge on several factors: external demand, energy prices, and policy settings. The baseline scenario (60% probability) sees GDP growth moderating to 0.20% QoQ in Q1 2026 as fiscal support wanes and global demand remains uneven. A bullish scenario (25% probability) could see growth accelerate to 0.40% if US and Chinese demand surprise to the upside and the ECB signals earlier rate cuts. Conversely, a bearish scenario (15% probability) would see growth slip back to 0.00% or negative territory if energy prices spike or geopolitical tensions escalate.
Drivers this month
- Export orders and PMI new orders indices will be key leading indicators for Q1 2026.
- Fiscal policy is set to tighten, with planned spending cuts of 0.50% of GDP.
- Geopolitical risks, notably in Eastern Europe and the Middle East, could disrupt supply chains.
Policy pulse
The ECB is expected to maintain a cautious stance, with markets pricing in a 30% chance of a rate cut by June 2026. Fiscal consolidation could weigh on domestic demand, but targeted investment incentives may cushion the impact.
Market lens
Bund yields are likely to remain range-bound, while the euro’s direction will hinge on relative growth and policy differentials. Equity markets may see increased volatility as investors reassess the growth outlook.
Closing Thoughts
Germany’s December 2025 GDP print offers a welcome sign of stabilization after a year of stagnation. The 0.30% QoQ growth beat expectations and signals that the worst may be over for Europe’s industrial powerhouse. However, the recovery remains fragile, with risks tilted to the downside as fiscal support fades and external uncertainties persist. Policymakers and investors will be watching closely for signs of sustained momentum in early 2026.
Key Markets Likely to React to GDP Growth Rate QoQ
Germany’s GDP Growth Rate is closely watched by global investors, with direct implications for equities, currencies, and fixed income. The following tradable symbols are historically sensitive to German growth data, reflecting their exposure to the country’s economic cycle, export performance, and policy outlook:
- DAX – Germany’s blue-chip equity index, highly correlated with domestic growth surprises.
- BAS.DE – BASF, a bellwether for German industrial and export trends.
- EURUSD – The euro/dollar pair, which often reacts to German macro data and ECB policy shifts.
- EURGBP – The euro/sterling pair, reflecting relative growth and policy expectations between the eurozone and UK.
- ETHEUR – Ethereum/euro, a proxy for risk sentiment and capital flows in the euro area.
| Year | GDP QoQ (%) | DAX YoY (%) |
|---|---|---|
| 2020 | -2.10 | -3.60 |
| 2021 | 1.80 | 15.80 |
| 2022 | 0.70 | -12.30 |
| 2023 | 0.50 | 9.20 |
| 2024 | -0.20 | 2.10 |
| 2025 | 0.05 | 4.70 |
Historically, positive GDP surprises have coincided with DAX outperformance, though the relationship is not perfectly linear. The December 2025 rebound could support further gains if sustained.
FAQ: Germany’s GDP Growth Rate QoQ for December 2025
Q: What does Germany’s 0.30% GDP Growth Rate for December 2025 indicate?A: The 0.30% QoQ growth signals a tentative recovery after months of stagnation, suggesting improving domestic demand and export conditions.
Q: How does this reading compare to previous months and the 12-month average?A: December’s 0.30% is up from November’s 0.00% and well above the 12-month average of 0.05%, marking the strongest print since mid-2023.
Q: What are the main risks and opportunities for Germany’s economy in early 2026?A: Key risks include fading fiscal support and external shocks, while opportunities lie in stronger export demand and potential ECB policy easing if inflation moderates.
Bottom line: Germany’s December GDP rebound is encouraging, but sustained growth will depend on external demand, policy support, and resilience to global shocks.
Updated 1/30/26
- Source: Sigmanomics database, Destatis, ECB, Eurostat, Bloomberg [1]
December’s 0.30% GDP growth stands out against November’s 0.00% and the 12-month average of 0.05%. This marks the strongest quarterly print since Q2 2023. The chart below illustrates the sharp inflection point, with the latest reading breaking a prolonged flat trend:
Figure: Germany GDP Growth Rate QoQ (%)
2025 Jan: 0.00 | Feb: 0.00 | Mar: 0.00 | Apr: 0.00 | May: 0.00 | Jun: 0.00 | Jul: 0.00 | Aug: 0.00 | Sep: 0.00 | Oct: 0.00 | Nov: 0.00 | Dec: 0.30