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German Economy Returns To Growth In Q4 2025 As Domestic Demand Strengthens

by THEFUTURE.TEAM

February 26, 2026

Germany’s economy grew by 0.3% in the fourth quarter of 2025, supported by stronger domestic consumption and higher construction investment, according to revised data from the Federal Statistical Office (Destatis). The result helped Europe’s largest economy close the year on a firmer footing after a period of uneven economic performance.

Domestic Demand Fuels Growth

Household and government consumption were the main drivers of growth in the final quarter. Increased domestic spending helped offset external economic pressures and supported overall stability. For the full year, Germany recorded growth of 0.2%, rising to 0.3% when adjusted for calendar effects, reflecting modest but positive momentum.

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Investment In Construction

Construction investment also contributed to the expansion, providing additional support to economic activity during a period of broader uncertainty. The sector’s performance suggests continued demand for infrastructure and housing-related projects, which could remain an important factor for growth in the coming quarters.

Strategic Outlook

Ruth Brand, President of Destatis, said in an interview that sustained domestic consumption played a central role in supporting economic activity at the end of the year. Looking ahead, analysts are likely to focus on whether consumer spending and investment levels remain stable as Germany navigates shifting global demand and ongoing economic adjustments. The fourth-quarter performance highlights the role of domestic demand in stabilizing growth and offers a more constructive starting point for the year ahead.

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Cyprus Industrial Sector Demonstrates Robust End-Of-Year Performance

Recent data from the Cyprus Statistical Service show that the Industrial Turnover Index reached 139.8 in December 2025, compared with a base value of 100 in 2021. The figure represents a 4.9% increase compared with December 2024.

Strong Momentum Across the Board

For the full year, the index increased by 5% compared with 2024. The figures indicate continued activity across several industrial sectors in Cyprus.

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Manufacturing And Mining Drive Growth

Manufacturing recorded the largest increase, with the index reaching 146.8 in December. This represents a 7.1% increase compared with the same month a year earlier. Mining and quarrying also recorded a higher turnover, with an increase of 6%.

Sectoral Disparities Highlight Strategic Challenges

Not all sectors recorded growth during the same period. The electricity supply sector reported a 3.8% decline, while the water supply and materials recovery sector decreased by 6.8% year-on-year.

Aligned With European Standards

The Industrial Turnover Index measures monthly changes in turnover across key industrial sectors, including mining, manufacturing, electricity supply, and water supply. Under the NACE Rev. 2 classification used across the European Union, the index covers sections B, C, D, and E. Activities such as sewerage, waste collection, and remediation are not included.