Germany edged out of recession with 0.2 % growth in the first quarter, but the recovery looked shaky as unemployment climbed to its highest level since the pandemic and looming U.S. tariffs threatened to stall momentum.
Germany’s economy eked out 0.2 % growth in the first quarter, breaking a run of two straight contractions, but fresh labour-market data and looming U.S. tariffs highlight the fragility of the upturn.
Preliminary figures from the statistics office on Wednesday showed GDP rising exactly as forecast, buoyed by consumer spending and stronger investment after a 0.2 % slide at the end of 2024. “Any positive number is welcome, but the increase is far too small to end Germany’s long stagnation,” said ING economist Carsten Brzeski.
Headline inflation eased to 2.2 % in April, near expectations and adding weight to calls for further European Central Bank rate cuts after June’s trim to 2.25 %. Core inflation, however, quickened to 2.9 % from 2.6 %, underscoring sticky domestic price pressures.
Despite the GDP uptick, the number of jobless Germans rose again in April and the unemployment rate hit its highest level since the pandemic. Deutsche Bank economist Marc Schattenberg blamed tariff uncertainty for sapping hiring, especially in export-focused manufacturing.
Economists fear the rebound could fizzle as higher U.S. duties on EU goods dampen orders later this year. The Ifo Institute warns output may shrink again by summer; JP Morgan says continued weakness could mark a third consecutive year of contraction—unprecedented for a G7 economy.
Retail sales, which had looked brighter earlier in the quarter, slipped 0.2 % in March, while import prices climbed, hinting at renewed inflation pressures. Corporate sentiment is also under strain: Mercedes-Benz withdrew its earnings outlook and Volkswagen flagged profits at the lower end of its guidance.
A centre-right coalition due to take office next week faces an urgent task: reviving Europe’s largest economy by restoring business confidence and unlocking consumer spending.
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The U.S. has approved the sale of 500 Patriot PAC-3 missiles to Ukraine in a deal worth an estimated $2.1 billion, but Kyiv could face years of delays before receiving the weapons it urgently needs to defend against intensifying Russian attacks.
Iranian Supreme Leader Ayatollah Khamenei has ordered Iran's armed forces to respond to any threat immediately and without geographical limits in statements posted to social media platforms on Saturday (31 October).
Demonstrators carrying Iranian flags and placards supporting the hijab gathered outside the Azerbaijani Embassy in London.
A Chinese-made AI chip has matched Nvidia’s H200 in tests conducted by its developer, marking a potential breakthrough in China’s efforts to reduce its dependence on foreign technology.
A hacking group linked to North Korea is widely believed to be behind the theft of $6.3 billion from cryptocurrency giant Binance, a cyberattack that experts describe as the largest cryptocurrency heist on record.
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Iran designated Britain's Royal Navy and Royal Air Force as terrorist organisations on Sunday, (1 November), and classified the country's foreign intelligence agency, MI6, as a hostile group, according to a statement from the Iranian Foreign Ministry.
Thousands protested in Albania's capital, Tirana, on Saturday (31 October), demanding Prime Minister Edi Rama's resignation over perceived corruption allegations and dissatisfaction with the government over a lack of jobs and poor education standards.
Russia has agreed to work with Ghana on developing a 2,000-megawatt nuclear power plant following talks at the Russia-Africa Summit in Moscow, Ghanaian Foreign Minister Samuel Okudzeto Ablakwa said on Saturday.
Foreign ministers from the U.S., Japan, Australia and India raised concerns over export restrictions and economic coercion at a Quad meeting in Atlanta, U.S., on Saturday, 31 October 2026, according to their joint statement.
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