| Consensus | Consensus Range | Actual | Previous | |
| Quarter over Quarter | 0.2% | 0.2% to 0.3% | 0.3% | 0.0% |
| Year over Year | 0.3% | 0.2% to 0.5% | 0.4% | 0.3% |
Highlights
Germany ended 2025 with fragile but positive momentum. GDP grew 0.3 percent quarter-over-quarter in the fourth quarter of 2025, about 0.1 percent above the consensus forecast for the quarter. On the other hand, it grew by 0.4 percent year-over-year after price and calendar adjustment, also about 0.1 percent above the annual consensus GDP forecast, thereby leading to an annual rise of 0.3 percent in 2025.
The key growth impulse came from household and government consumption, while the economy continued to struggle with weak foreign trade. Calendar effects slightly flattered the headline, since without 0.7 extra working days, year over year, the fourth quarter growth was only 0.4 percent, underlining how narrow the escape from stagnation was.
Still, after two recessionary years and ongoing industrial headwinds, even modest growth signals resilience in domestic demand and sets a low but firmer base for 2026. These updates take the RPI to 9 and the RPI-P to 18, meaning that economic activities continue to perform within the expectations of the German economy.
Market Consensus Before Announcement
The consensus looks for increases of 0.2 percent on quarter and 0.3 percent on year for Q4 after 0.0 percent on quarter and 0.3 percent on year in Q3.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The provisional or flash estimate is normally released in the second week of the second month after the reference quarter. This is based on only limited data and provides just quarterly and annual growth rates and a limited qualitative guide to how the major output sectors performed.
Description
GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.
Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.
Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anaemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.