![\"\"](\"https:\/\/static.euronews.com\/website\/images\/logos\/logo-euronews-stacked-outlined-72x72-grey-9.svg\"){kind=logo}
\n ADVERTISEMENT<\/p>\n
\n ADVERTISEMENT<\/p>\n
Germany\u2019s economic outlook showed tentative signs of improvement in October, with the ZEW Indicator of Economic Sentiment rising modestly, although underlying risks \u2014ranging from persistent inflation to sluggish trade \u2014 continue to cast a shadow over the country\u2019s recovery.<\/p>\n
The ZEW index rose two points to 39.3 in October 2025, a modest rebound from September’s reading of 37.3.<\/p>\n
While marking the highest level since July’s post-pandemic peak, the outcome fell short of economists’ forecasts of 40.5, underscoring lingering uncertainty among financial market experts.<\/p>\n
\u201cExperts are still hoping for an upturn in the medium term,\u201d said ZEW President Professor Achim Wambach. <\/p>\n
\u201cDespite persistent global uncertainties and the lack of clarity regarding the implementation of the state investment programme, the ZEW indicator sees a slight increase in October.\u201d<\/p>\n
Sentiment across the eurozone weakened in October, reflecting growing concerns over political and fiscal stability in France and other member states. <\/p>\n
The ZEW expectations index for the bloc declined to 22.7, a drop of 3.4 points from September. The current conditions index also deteriorated to minus 31.8, down three points.<\/p>\n
Export expectations improve, but not for autos<\/p>\n
October\u2019s rise in sentiment was supported by improved export expectations following a difficult summer for Germany\u2019s trade-intensive economy. <\/p>\n
Notably, outlooks brightened for the mechanical engineering, metal production, pharmaceutical and electrical equipment sectors. <\/p>\n
The automotive industry, however, remains a weak link. <\/p>\n
The ZEW\u2019s sub-index for the sector declined slightly, suggesting that firms remain vulnerable to adverse trade dynamics and weaker demand from key markets. <\/p>\n
The recent EU\u2013US trade agreement continues to weigh on German manufacturers, particularly carmakers, as higher tariffs and regulatory uncertainty add to cost pressures.<\/p>\n
Inflation accelerates again<\/p>\n
Adding to the unease, final inflation figures released by the Federal Statistical Office confirmed that consumer prices in Germany rose 2.4% in September compared to the previous year \u2014 up from 2.2% in August and marking the fastest pace in 2025. <\/p>\n
\u201cFollowing a period of decreasing inflation since the start of the year, an increase in the rate of inflation was registered for the second consecutive month,\u201d said Ruth Brand, President of the Federal Statistical Office (Destatis).<\/p>\n
While energy prices continued to decline, they did so at a slower rate. <\/p>\n
Core inflation \u2014 which excludes food and energy \u2014 crept up to 2.8%, from 2.7% in the previous three months, indicating broader and more persistent price pressures across services and essential goods. <\/p>\n
Service prices climbed 3.4% year-on-year, driven by notable increases in passenger transport services (+11.2%), healthcare (+6.5%), and insurance (+6.5%). Rents also continued to contribute to headline inflation, rising 2.0% year-on-year.<\/p>\n
German trade outlook remains precarious<\/p>\n
Germany\u2019s export sector continues to face headwinds from a combination of unfavourable exchange rates and geopolitical tensions. <\/p>\n
The most recent data for August showed a marked deterioration in the country\u2019s trade surplus, which shrank to \u20ac10.6 billion from \u20ac17.2bn a year earlier. <\/p>\n
Exports fell 5.8% to \u20ac99.2bn, while imports edged up 0.6% to \u20ac88.6bn. <\/p>\n
Particularly concerning is the collapse in exports to the United States \u2014 Germany\u2019s single largest export destination. <\/p>\n
Shipments to the US declined for the fifth consecutive month in August, falling 2.5% from July and plunging 20% on a year-on-year basis to just \u20ac10.9bn. This represents the lowest level of transatlantic exports in nearly four years, a direct consequence of the tariffs introduced by the Trump administration. <\/p>\n
Markets retreat as trade tensions resurface<\/p>\n
European equities retreated on Tuesday amid renewed global trade concerns, particularly between the US and China. <\/p>\n
Germany\u2019s DAX index fell 0.9% to 24,180, reversing part of Monday\u2019s rally. <\/p>\n
Tensions escalated after Beijing announced retaliatory measures against several US defence-linked firms, following Washington\u2019s scrutiny of China\u2019s shipbuilding and logistics sectors. <\/p>\n
Among major movers, Siemens Energy, Continental and Rheinmetall all declined sharply, falling between 3.6% and 4.6%, as investors took a more cautious stance on industrial and defence stocks. <\/p>\n
In contrast, Zalando shares surged 3.5% after Deutsche Bank anticipated positive quarter results, citing resilient demand in the e-commerce sector. Volkswagen also edged 1.2% higher after reassuring investors about its exposure to tariffs and reaffirming guidance ahead of its third-quarter results.<\/p>\n","protected":false},"excerpt":{"rendered":"ADVERTISEMENT Germany\u2019s economic outlook showed tentative signs of improvement in October, with the ZEW Indicator of Economic Sentiment…\n","protected":false},"author":2,"featured_media":500744,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5310],"tags":[2000,299,26209,1824,476,554],"class_list":{"0":"post-500743","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-eu","9":"tag-europe","10":"tag-german-economy","11":"tag-germany","12":"tag-inflation","13":"tag-trump-tariffs"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115376680368572764","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/500743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=500743"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/500743\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/500744"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=500743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=500743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=500743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}