Germany’s economy contracted by 0.3% in the second quarter of 2025 from the previous three months, revised data from the Federal Statistical Office showed on Friday. The update deepens the initial flash estimate of a 0.1% drop and reverses the 0.3% growth recorded in the first quarter, underscoring the fragility of Europe’s largest economy. The sharper decline reflects weaker industrial activity and falling investment. Capital spending slid 1.4%, while goods exports dipped 0.1% as demand from the United States cooled following a front-loading of orders ahead of Washington’s 10% baseline tariff that took effect in April. Household consumption eked out a 0.1% rise and government expenditure grew 0.8%, but these gains were insufficient to counter the drag from trade and manufacturing. Germany has now posted negative growth in seven of the last 11 quarters and remains the only G-7 member without net expansion since 2023, raising the prospect of an unprecedented third straight year of recession. Berlin’s “investment booster” tax package and planned increases in defence and infrastructure outlays aim to revive momentum, yet economists such as ING’s Carsten Brzeski warn that a meaningful recovery is unlikely before 2026 without deeper structural reforms.