And again it’s the eleventh hour –my late publishing of Germany’s economic KPI is a vivid testimony to the current business climate. But hey, let’s not discuss my lame excuses and jump right into it:
Mainly due to the incredible debt-package just fixed by the new German government, leading German and international institutions have revised their respective predictions about Germany’s GDP upwards, the ifo-institute to 0.3% in 2025 and even 1.5% in 2026 (here), the OECD to 0.4% in 2025 and 1.2% in 2026 (here).
The German DAX price index (for an explanation, why I prefer this index, cf. here) started at 8,791 points on 2nd May, reached ist peak with 9,082 points on 27th May, before receding to 8,990 points on 30th May. All-in-all, the index gained 199 points in the course of May.
After the strong rise in the previous month, German industrial orders still managed a small increase in April: rose significantly: after increasing by +6.9% (MoM, -6.3% YoY) in December 2024, then crashing by -7.0% (MoM, -2.6% YoY) in January and remaining unchanged (0.0% MoM, -0.2% YoY) in February, orders increased by 3.6% (MoM, even 3.8 YoY) in March and now by another 0.6% (MoM, even 4.8% YoY) in April 2025.
There against, Germany’s industrial production shrunk: after decreasing by -2.4% (MoM, even -3.1% YoY) in December 2024, again gaining 2.0% (MoM, -1.6% YoY) in January, then – again – decreasing by -1.3% (MoM, even -4.0% YoY) in February, production has increased by 3.0% (MoM, -0.2% YoY) in March, before – again – decreasing by -1.4% (MoM, even -1.8% YoY) in April 2025.
German exports, though, increased: after increasing by +2.9% (MoM, even +3.4% YoY) in December 2024, exports decreased by -2.5% (MoM, -0.1% YoY) in January, before increasing by 1.8% (MoM, +0.1% YoY) in February, by another 1.1% (MoM, even 2.3% YoY) in March and now by 1.1% (MoM, 2.3% YoY) in April 2025. For other German KPI’s, I refer you, first, to the usual “Destatis Deutschland-Dashboard„ (here) and the „Data Commons (Germany)“ (here), but also to the new IWH Forecasting Dashboard and the DATEV Mittelstandsindex.
The German Target 2 balance lost a rather insignificant Euro 8bn in April 2025 and ended at Euro 1,066bn. The German inflation-rate remained unchanged: starting from its peak of 10.4% in October 2022, the rate decreased to finally 1.6% in September 2024 but has re-increased to finally 2.6% in December 2024, before again decreasing to 2.3% in January, where it remained in February, before further decreasing to 2.2% in March, to 2.1% in April where it again remained in May 2025 (each YoY).
The German Labor market only „enjoyed“ a small spring boom: After rising to 6.4% in January, unemployment remained at this level in February and also in March, before decreasing by a marginal -0.1% to 6.3% in April and now to 6.2% in May 2025 (all MoM). Finally, the spell has been broken, German insolvency filings and after 23 consecutive months, the figure decreased for the first time: After increasing by 14.1% in January, 12.1% in February,“only“ 5.7% in March and 3.3% in April, corporate insolvencies slighty fell by -0.7% in May 2025 (all YoY; cf. my then most recent comment, here, in German).
The leading German sentiment indicators were not in sync: The German (Industrial) Purchasing Managers’ Index (PMI) slighty decreased by 0.1 points to 48.3 points in May 2025. There against, the ZEW Indicator for business expectations gained some 39 points and ended at +25.2 points in May 2025. Also, the ifo Business Climate Index further rose to 87.5 points in May, some 0.6 points compared to April 25. The GfK-consumer index, slighty increased to -20.8 points in May 2025.
To sum up: After a strong March saved the first quarter 2025 and April presented a mixed bag (here), the figures for May indeed seem to allow for some optimism at least on the short term – meaning until year end. Seemingly, the sheer amount of debt promised seems to suffice to make the German economy, if not great, at least not as weak as it was two months ago. Psychology-wise, the new coalition’s plan seems to work – for now.