Germany's unemployment rate rose at the start of the year, despite a smaller than expected increase in the number of people out of work, as the weakness of Europe's biggest economy takes its toll in the labour market.

In the early 2000s, the complaints were similar...We missed that underneath the surface many things were changing,” says Jens Ulbrich, chief economist at the Bundesbank, Germany’s central bank. Back then,

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.

Germany has been systematically underinvesting and its restrictive fiscal policies have been a brake on growth, German Economy Minister Robert Habeck said on Wednesday.

Europe’s economy stagnated late last year as its former growth engine, Germany, finished a second straight year of shrinking output.

The country is focused on exports, but China is slowing imports and U.S. tariff threats are growing. Politicians are offering few alternatives.

The German economy shrank by 0.2% in the fourth quarter of 2024, according to preliminary data released by Germany’s statistics office Destatis on Thursday.

The German economy is in deep crisis, with gross domestic product likely to contract 0.1% this year, the BDI industry association said on Tuesday, putting it on track for three years of declining growth for the first time since reunification.

After two years of negative growth, the outlook for the German economy remains dreary, with the Federation of German Industry (BDI) business lobby group on Tuesday predicting another year of decline in 2025.