The latest data for the German economy is once again signalling weakness. The ifo index for August has just been published, showing that nothing more than stagnation is to be expected in German industry at the end of the summer. This is not surprising. In the first half of 2025, Germany’s trade surplus was just over €100 billion, which was 22 per cent below the figure for the first half of 2024, even before the American tariff policy had really come into effect.
When exports stagnate (down 0.1 per cent) and imports increase significantly (up 4.4 per cent), this immediately means a reduction in demand for German companies with largely unchanged costs. Although many companies have already laid off workers, it is nevertheless certain that the profit situation, especially for German industrial companies, has deteriorated significantly once again in the first half of this year. And this comes immediately after the longest recession in German history.
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