Germany's DIHK — the country's main chamber of commerce — has slashed its 2026 economic growth forecast to just 0.3%, barely above stagnation. A quarter of surveyed German companies now rate their current business situation as poor, a level of pessimism last seen during the COVID-19 pandemic. Only one in ten firms expects conditions to improve, with elevated energy and raw material costs repeatedly flagged as core operational pressures.
Germany is the eurozone's largest economy, so a near-stagnant outlook drags on European equities broadly and puts pressure on the euro. Export-heavy German industrials and automakers are most directly exposed, and any further weakness could push the European Central Bank toward faster rate cuts — which would affect European bond prices and currency-hedged positions across the board.
July 24, 2025: Eurozone PMI flash estimates (key read on business activity across Europe). July 31, 2025: Eurozone Q2 GDP preliminary release. September 11, 2025: Next European Central Bank rate decision.
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