According to Bloomberg, Donald Trump's return to power and the upcoming elections have dampened the mood of German businesses. Entrepreneurs in Europe’s largest economy are anxious and unsettled, with growing concerns about the future. What lies ahead? What should they do? It is time to recover!

This year, German companies have adopted a notably pessimistic outlook. Given this climate, many experts are doubtful that Germany can achieve meaningful economic growth in the near future.

Recent data revealed that the Ifo Business Climate Index dropped to 84.2 points in January, down from 84.4 points in December. Clemens Fuest, president of the Ifo Institute, attributes this decline to uncertainty surrounding Donald Trump's return to the White House and the upcoming elections in Germany. As a result, many entrepreneurs are holding back on investments. Fuest warns that the economy is likely to face another challenging year ahead.

Bloomberg analysts estimate that Germany has just experienced its second consecutive year of economic contraction, largely driven by struggles in the manufacturing sector. Contributing factors include weakened external demand and rising borrowing costs, which have further strained the country’s economic performance. In addition, there are growing concerns over an aging workforce and excessive dependence on China.

Economist Martin Ademmer paints a bleak picture for the near-term prospects of the German economy. This is particularly true for the troubled manufacturing sector, where business expectations have deteriorated further. He notes that risks of slower growth are now the dominant factor shaping Germany's economic landscape. The expert also warns that the ongoing escalation of trade conflicts could deal a heavy blow to Germany's export-driven industries.

The Bundesbank and other analysts continue to forecast modest growth for Germany this year. Economic output is likely to be weighed down by the looming threat of import tariffs from Donald Trump, which remains a significant risk to the country's economic outlook.

Earlier, the German government lowered its GDP growth forecast for 2025 from 1.1% to 0.3%. Back in the fall, the authorities had been more optimistic, expecting a 1.6% increase in GDP by 2026.