German business expects economic contraction for the third consecutive year.

According to German industrial lobby, the largest economy in Europe will shrink for the third consecutive year in 2025 - by 0.1%.

The average analyst forecast expects growth of 0.4% in 2025. However, due to consecutive years of GDP contraction in 2024, Germany's prospects for 2025 remain bleak.

'The situation is very serious. Specifically, industrial growth has suffered a structural break,' said the president of BDI group, Peter Leibinger.

The Bundesbank projected growth of 0.2% and warns of a possible contraction if U.S. President Donald Trump imposes trade tariffs.

In its monthly bulletin, the Bundesbank reported that the economy is unlikely to emerge from a prolonged period of stagnation in the first quarter, due to weak production and declining private spending.