Germany’s GDP for December 2025: First Expansion in a Year Signals Fragile Recovery
Germany’s Gross Domestic Product (GDP) for December 2025, released January 30, 2026, showed a quarterly increase of 0.30%, outpacing both consensus estimates and the previous flat reading. This marks the first positive quarterly print since late 2024, raising hopes of a turning point for Europe’s largest economy.
Table of Contents
Big-Picture Snapshot
Drivers this month
Germany’s real GDP grew by 0.30% quarter-on-quarter in December 2025, according to the Sigmanomics database[1]. This compares to 0.00% in November 2025 and marks the first positive print since December 2024. The 12-month average for GDP growth stands at -0.10%, highlighting the significance of this rebound.
- Private consumption contributed an estimated 0.12 percentage points (pp) to the headline figure, supported by easing inflation and a modest uptick in real wages.
- Net exports added 0.08 pp, as energy imports stabilized and auto exports to the US and Asia improved.
- Fixed investment, especially in construction and machinery, contributed 0.06 pp, reflecting early signs of business confidence returning.
Policy pulse
The GDP print sits above the Bundesbank’s Q4 2025 forecast of 0.20%. With inflation trending near 2.40% YoY and unemployment steady at 5.70%, the reading gives the European Central Bank (ECB) some breathing room but does not yet justify a hawkish pivot.
Market lens
Immediate reaction: EUR/USD rose 0.20% in the first hour after the release, while the DAX gained 0.40%. German 2-year bund yields edged up by 3 basis points, reflecting reduced recession fears and a modest repricing of ECB rate cut expectations.
Foundational Indicators
Macro context
December’s GDP print reverses a year-long stagnation. The previous six quarters saw flat or negative growth, with readings of 0.00% from June to November 2025 and -0.20% in March 2025. Compared to December 2024’s -0.10%, the latest figure signals a modest but meaningful inflection.
- Headline inflation averaged 2.40% YoY in December, down from 3.10% in September 2025.
- Unemployment remained stable at 5.70%.
- Industrial production rose 0.50% MoM in December, the strongest since mid-2024.
Fiscal stance
Germany’s government maintained a broadly neutral fiscal stance in late 2025, with modest stimulus targeted at energy transition and digital infrastructure. The budget deficit is projected at 2.10% of GDP for 2025, below the EU’s 3% threshold.
External shocks & risks
Geopolitical tensions in Eastern Europe and ongoing supply chain disruptions remain key downside risks. However, energy prices stabilized in Q4 2025, and the euro’s depreciation supported export competitiveness.
Chart Dynamics
Market lens
Immediate reaction: EUR/USD rose 0.20% and DAX gained 0.40% after the print. Bund yields climbed as investors dialed back recession bets. Market-implied ECB rate cuts for 2026 were trimmed by 10 basis points, reflecting a slightly more optimistic growth outlook.
Forward Outlook
Scenario analysis
- Bullish (25%): GDP growth accelerates to 0.40–0.50% QoQ in Q1 2026, driven by stronger exports and a rebound in investment. ECB delays rate cuts, and the DAX outperforms peers.
- Base case (60%): Growth stabilizes at 0.20–0.30% QoQ through mid-2026. Domestic demand remains subdued, but external headwinds ease. ECB cuts rates once in H2 2026.
- Bearish (15%): Growth slips back to 0.00% or negative as global demand falters and energy prices spike. Fiscal constraints limit stimulus, and market sentiment sours.
Risks and opportunities
Upside risks include faster-than-expected recovery in global trade and successful deployment of EU recovery funds. Downside risks stem from renewed geopolitical tensions, persistent inflation, and a potential slowdown in China.
Structural trends
Germany’s long-run growth potential remains capped by demographic headwinds and sluggish productivity. However, ongoing investment in green technology and digitalization could lift trend growth over the medium term.
Closing Thoughts
Germany’s December 2025 GDP print marks a welcome, if fragile, return to growth. The 0.30% QoQ expansion is a clear improvement over the previous year’s stagnation, but the recovery remains tentative amid persistent risks. Policymakers and investors will watch closely for signs of sustained momentum in early 2026, as the balance of risks remains finely poised.
Key Markets Likely to React to Gross Domestic Product QoQ
Germany’s GDP print is a bellwether for European and global markets. The following symbols are historically sensitive to German growth data, reflecting direct or indirect exposure to the country’s economic cycle, currency, and risk sentiment. Each has shown a measurable correlation with GDP surprises and trends.
- DAX – Germany’s blue-chip equity index, highly sensitive to domestic growth and export prospects.
- BAS.DE – BASF, a German industrial bellwether, tracks cyclical swings in manufacturing and exports.
- EURUSD – The euro/dollar pair, which reacts to growth-driven shifts in ECB policy expectations.
- EURGBP – The euro/sterling cross, reflecting relative growth and monetary policy divergence between the eurozone and UK.
- BTCEUR – Bitcoin/euro, which can see volatility as macro uncertainty drives risk appetite and currency hedging.
| Year | Avg. GDP QoQ (%) | DAX YoY Return (%) |
|---|---|---|
| 2020 | -2.10 | -3.60 |
| 2021 | 1.20 | 15.80 |
| 2022 | 0.30 | -12.30 |
| 2023 | 0.10 | 10.50 |
| 2024 | -0.10 | 2.20 |
| 2025 | 0.00 | 1.60 |
Since 2020, DAX returns have broadly tracked the direction of German GDP, with equity outperformance during periods of above-trend growth and underperformance during contractions or stagnation.
FAQ
Q: What does Germany’s December 2025 GDP print mean for investors?
A: The 0.30% QoQ growth signals tentative recovery, boosting equities and the euro, but risks remain from weak demand and global headwinds.
Q: How does this GDP reading compare to recent history?
A: December’s print is the first positive quarterly growth since late 2024, reversing a year of stagnation and beating the 12-month average of -0.10%.
Q: What are the main risks to Germany’s growth outlook?
A: Key risks include external shocks, energy price volatility, and sluggish domestic demand. Upside could come from stronger exports and investment.
Bottom line: Germany’s GDP rebound is encouraging but fragile. Sustained recovery will depend on global demand, policy support, and resilience to shocks.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
Updated 1/30/26
- Sigmanomics database, Germany Gross Domestic Product QoQ, release January 30, 2026.
December’s 0.30% QoQ GDP growth stands in sharp contrast to November’s 0.00% and the 12-month average of -0.10%. The chart below illustrates a clear break from the stagnation of the past year, with the latest reading marking the strongest quarterly expansion since Q3 2023.
While the improvement is notable, the level of GDP remains just 0.20% above its December 2024 mark, underscoring the slow pace of recovery. The chart also highlights the persistent weakness from March through November 2025, when GDP failed to register any growth.