… are those you falsified yourself. This quote, attributed to Winston Churchill, comes into mind when you look at the latest revision of Destatis‘ GDP-data spanning a period of over three years, (conviniently?) exactly covering the period of the last coalition and leading to a general downward correction of GDP data in this period (see for the discussion here, here and here, I also stepped in here, sorry, all in German). But hey, let’s take a relaxed look at the details:
Also, I should have read the news before posting my latest monthly, since directly after my posting, I read that the German GDP shrank by -0.1% in the second quarter of 2025. So, if there is no miracle happening in the very near future, Germany will have three consecutive years of recession – which has never happened before and puts it at the very end of the European countries. Greece is grinning – and rightly so!
The German DAX price index (for an explanation, why I prefer this index, cf. here) was seemingly unfazed by the GPD-revision and the tense global situation: starting at 8,869 points on 1st July, the index reached its monthly high alreaddy on 9th July with 9,127 points before gradually declining to 9,015 points on 31st July 2025. All-in-all, the index gained 146 points in the course of July.
German industrial orders took another hit in June: after remaining unchanged (0.0% MoM, -0.2% YoY) in February, orders increased by 3.6% (MoM, even 3.8 YoY) in March, by another 0.6% (MoM, even 4.8% YoY) in April, before decreasing by -1.4% (MoM, but still +5.3% YoY) in May and another -1.0% (MoM, but +0.8% YoY) in June 2025.
Also, Germany’s industrial production crashed again, thereby continuing ist zig-zag-course of the previous months: after decreasing by -1.3% (MoM, even -4.0% YoY) in February, increasing by 3.0% (MoM, -0.2% YoY) in March, decreasing by another -1.4% (MoM, even -1.8% YoY) in April, again growing by 1.2% (MoM, still 1.0% YoY) in May, production decreased again by a considerable -1.9% (MoM, even -3.6% (!) YoY) in June 2025.
German exports, though, increased: after increasing by 1.8% (MoM, +0.1% YoY) in February, by another 1.1% (MoM, even 2.3% YoY) in March before decreasing by -1.7% (MoM, -2.1% YoY) in April and by another -1.4% (MoM, but +0.4% YoY) in May, exports expanded by 0.8% (MoM, even +2.4% YoY) in June 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 another Euro 8bn in May 2025 and ended at Euro 1,043bn. 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 before reaching 2.0% in June, where it remained in July 2025 (each YoY).
The German Labor market is getting weaker: After 6.4% in February and also in March, unemployment decreased by a marginal -0.1% to 6.3% in April, to 6.2% in May where it remained in June before rising to 6.3% in July 2025 (all MoM). German insolvency filings strongly increased again: After increasing by 12.1% in February, „only“ 5.7% in March and 3.3% in April, then falling by -0.7% in May, before again increasing (moderately) by +2.4% in June, filings increased by 19.2% in July 2025 (all YoY; cf. my then most recent comment, here, in German).
The leading German sentiment indicators were positively in sync: The German (Industrial) Purchasing Managers’ Index (PMI) increased by another 0.1 points to 49.1 points in June 2025. Also, the ZEW Indicator for business expectations gained another 5.2 points and ended at 52.7 points in July 2025. Finally, the ifo Business Climate Index, also gained 0.2 points and rose to 88.6 points in July 2025. The GfK-consumer index, though, slighty decreased by -0.3 points to -20.3 points in July 2025.
To sum up: I think, the German economy has still not grasped the severity of the situation – the mood (expressed in the sentiment indices) is better than the „hard“ KPI should allow for. And it is not only Destatis‘ revision of past GDP data – and the publication of another recessionary quarter. Below the surface of this data published in the MSM lie some more nasty news: While looking for a report about the shrining competivness of the German economy mentioned by one of the few remaining economists to be taken serious in Germany, Veronika Grimm (here, in German), I stumbled across a Bundesbank paper titled: „ECB Newsletter ‘Extinguishing sparks before they start a fire: managing crises in the lending business effectively’“ (here, in German). Although it should not come as a surprise given the German economic woes, this headline proves that apparently German banks already now have to deal with larger issues in the credit-market. And the very ECB at the same time plans for a „clima factor“ in the banks‘ lending practice (here, in German).
Since punch-lines like „the perfect storm“ have been over-stretched for the past decades, it is not easy to describe the situation in the sommer of 2025 in a catchy phrase. So, I will not even try – and hope that you enjoy the remaining summer. Maybe and hopefully I will be wronged with my fears for the coming autumn.