Europe’s economy has stagnated at the end of last year as former growth engine Germany floundered to the end of a second straight year of shrinking output.

Berlin brought down its 2025 economic growth forecast from 1.1% to 0.3%. A government report cited the collapse of the government as the main reason.

Germany on Wednesday lowered its 2025 growth forecast to 0.3%, down from 1.1%, as the country's stagnant economy continues to struggle. Economy Minister Robert Habeck announced the new gross domestic product (GDP) estimate in a presentation of the government's annual economic report in Berlin.

Germany's government has slashed its 2025 growth forecast for the country’s economy, Europe’s biggest, to just 0.3% after it shrank for two consecutive years.

BERLIN (Reuters) -German exports are expected to decline by 0.3% in 2025 due to weakening competitiveness as well as growing geopolitical and trade tensions, according to the government's annual economic report,