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OECD ECONOMIC SURVEYS: GERMANY 2025
Germany: Reforms necessary to foster business dynamism and investment
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Germany should focus on reducing administrative burdens for firms and regulatory barriers to competition while addressing skilled labour shortages to help revive economic growth and maintain high living standards.
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Inflation may prove more persistent than expected
Inflation in the OECD is now projected to be slightly higher through 2026 than previously anticipated. OECD-wide inflation is projected to reach 4.2% in 2025, up from 3.7% in the December projections, and 3.2% in 2026, compared to a previous estimate of 2.9%.
Central banks should remain vigilant to ensure disinflation in times of heightened uncertainty and increased trade costs. Provided trade tensions do not intensify further and inflation expectations remain anchored, policy rate reductions can continue in economies where inflation is projected to moderate. Under the projected outlook for inflation and GDP growth, policy rate reductions are expected to continue during 2025 and in some cases 2026 in all the major advanced economies other than Japan.
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