While economic growth was at a solid level globally in 2024, it was only modest in Europe. In the largest European economy, Germany, gross domestic product (GDP) actually contracted slightly. The weak European growth is therefore largely attributable to Germany’s weakness. The faltering growth forecast for Germany in 2025 will also be reflected in the Eurozone figures. Economic performance in the European Union lagged behind other regions of the world such as North America (NAFTA) or Asia.

The German economy will still be affected by a high level of uncertainty in 2025, which will have a negative impact on consumer sentiment and corporate investment. A quick formation of a new Government after the Federal elections in February 2025 could help to reduce uncertainty. However, it is foreseeable that the fiscal scope for economic stimulus measures will be very limited. However, the ECB’s interest rate cuts to date and expected further interest rate cuts in 2025 will make it easier to finance investments and consumer durables. This could benefit the construction industry in particular, but also the automotive industry and mechanical engineering, which are particularly important in Germany.

In passenger transport, an increase is also expected for 2025, due in part to positive effects from the Germany-Ticket.

Following a slight decline in volume sold in 2024, freight transport is expected to stagnate in 2025, as no significant catch-up effects are expected in the core industries that declined in the previous year.

One of the risks for 2025 is the highly uncertain geopolitical situation, particularly with regard to the war in Ukraine. There are also risks in Germany that could have a significant impact on DB Group. A protracted Government formation process would delay the resolution of key challenges. It is also uncertain what budgetary priorities the future Federal Government will set.