Europe’s largest economy grew more than expected at the end of last year, but this is likely not cause for celebration among three million unemployed workers in Germany as major companies continue with widespread job cuts.
The German economy grew faster than expected at the end of 2025, official data showed Friday, suggesting that a recovery is gathering pace in Europe’s struggling industrial powerhouse.
But the number of people unemployed jumped above three million in January for the first time in months, the labour agency said, underscoring the continued difficulties for the economy.
Economic output expanded 0.3 percent in the final quarter of last year, according to the statistics agency Destatis. A first estimate from the agency in mid-January had put the growth figure at 0.2 percent.
“The German economy ended 2025 in positive territory after a turbulent year, particularly for foreign trade,” said the agency, noting that higher government and consumer spending had boosted growth.
Earlier this month it had estimated GDP expansion for 2025 as a whole at 0.2 percent, marking a return to growth after two years of recession.
Germany has been hammered by a manufacturing downturn, high energy costs, weak demand in key export markets and the US tariff barrage.
Chancellor Friedrich Merz last year announced vast extra public spending on defence and infrastructure, and analysts say its effects are now starting to feed through to the wider economy.
Addressing parliament Friday, Economy Minister Katherina Reiche said that “we are seeing light at the end of the tunnel again”, noting that the government expected growth of one percent this year and 1.3 percent in 2027.
“That is not yet an economic boom, but it is a start and the signs are encouraging,” she said.
There are nevertheless signs that the economy faces continued difficulties.
On Friday the Federal Employment Agency reported nearly 3,085,000 people were unemployed this month, about 177,000 more than in December. The seasonally adjusted unemployment rate was stable at 6.3 percent.
READ ALSO: Which major German companies are cutting jobs this year?
The figure was last above three million in August.
“There is currently little momentum in the labour market,” said agency chief Andrea Nahles.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
