THE private sector her Germany It was developed at the fastest pace of the last 10 months, hoping that the massive increase in government spending will offset any blow from US duties.
S&P Global’s PMI Complex Index (PMI) for Germany increased to 50.9 in March from 50.4 last month, according to today (24.3.2025). This kept him above the limit of 50 that distinguishes growth from shrinkage, but was slightly smaller than the 51.1 analysts expected.
“The German economy has caught the bottom,” said Cyrus de la Rubia, an economist at the Hamburg Commercial Bank, adding that “there is a possibility of circular recovery and that the budget package is overruning the damage that will probably be caused by US duty policy.”
With the development at the beginning of the year seem promising and spending plans to give the manufacturers, “this could signal the principle of a more sustainable recovery,” he said in a statement.
There is increasing optimism in Germany that the upcoming increase in government spending on the army and infrastructure will get the economy out of five -year stagnation. Awaiting hundreds of billions of euros in costs to take place in the coming years, investor confidence, as measured by the ZEW Institute, has reached the highest level of the last three years.
It is also hopeful that the new government of the country, which will lead the conservative Friedrich Mertz, will follow other growth -oriented commitments – such as bureaucracy cuts and the reform of migration. The bright prospects for Germany contradict France, whose PMI index has improved more than expected, but still signifies shrinkage.
Germany’s additional investments, however, will be late. Bundesbank said last week that the gross domestic product would only recover slightly in the first quarter, after a decline of 0.2% in the last three months of 2024, describing the underlying circular trend as “weak”.
At the same time, he stressed that the prospects are “particularly uncertain at the moment”. US commercial contributions could reduce exports more intensely, while most fiscal spending could give a stronger boost to production.
“There are risks – US duties and the sluggish sector, which was slightly developed in March, worth watching,” De La Rubia said. “But with a new government that is likely to be formed in the coming weeks, trust can quickly recover.”