Economic activity in Germany weakens sharply in second quarter

Germany’s economy contracted by 0.3% in the second quarter of 2025 compared with the previous three months, according to revised figures released by the federal statistics office on Friday. The new data showed a sharper decline than the initial estimate of a 0.1% drop.

The revision reflected weaker-than-expected industrial output and a downgrade in household consumption. Consumer spending was adjusted to a modest 0.1% increase after incorporating new figures from the services sector, particularly accommodation and food services in June.

Government expenditure provided some offset, rising by 0.8% from the previous quarter. However, investment activity slumped, falling by 1.4% over the same period.

External trade also weighed on growth, as exports of goods and services slipped by 0.1%, offering no relief to the overall contraction.