German Chancellor Friedrich Merz has declared restoring economic growth the government’s top priority for 2026, acknowledging previous efforts have not sufficiently boosted competitiveness. He described the economic outlook as “very critical in some areas,” stressing the need for decisive action.

• Germany's economy shrank in 2023 and 2024, with a projected growth of just 0.1 percent in 2025.
• Key person involved: German Chancellor Friedrich Merz.
• The economic strain on Germany is attributed to high energy costs, weak global demand, slow structural reform, and U.S. tariff hikes in 2025.