German labor market: One in three companies plans to cut jobs

After two years without economic growth, the German government and economic research institutes are expecting at best minimal growth for the current year. Following a decline in the spring, gross domestic product (GDP) stagnated in the third quarter.

The German government expects GDP growth of 1.3 percent for the coming year. This growth is expected to be driven primarily by billions of euros in government spending on infrastructure, climate protection, and defense. However, business associations are calling for fundamental structural reforms, citing comparatively high energy prices and taxes, as well as rising social security contributions. The International Monetary Fund ( IMF ) forecasts growth of only 0.9 percent for the German economy in 2026.