The German economy has been struggling with low growth in recent years, ranking the worst among the G7 Western economies. Economists predict that Germany’s economic performance in 2025 will likely remain at a similar level as before the COVID-19 pandemic.

This negative trend reflects structural problems that have deepened after the pandemic and the war in Ukraine. The main challenges for the German economy include low productivity growth, an aging population, and high energy and raw material costs. These factors slow down competitiveness and increase pressure on businesses. Additionally, the transition to renewable energy remains costly and complex, particularly for the industrial sector.

What Do the Forecasts Say? According to the prestigious ifo Institute, it is still unclear whether the current phase of stagnation is a temporary weakness or a permanent and painful transformation of the economy. The institute outlines two scenarios: The pessimistic scenario predicts that GDP will grow by only 0.4% in both 2025 and 2026. The optimistic scenario forecasts growth of 1.1%.

Consumer price growth in Germany has slowed, but according to the chief economist of Commerzbank, "the inflation problem is not yet solved." Economists expect inflation in 2025 to remain above the two percent threshold.

And although consumers are expected to spend more, their expenditures will not grow as much as anticipated – despite rising real wages, there remains a sense of uncertainty among people regarding future employment.

Despite the economic challenges we have outlined, Germany’s strengths cannot be overlooked. Even in 2025, it remains a key market for entrepreneurs (not only from Central and Eastern Europe). But why?

In the Ease of Doing Business ranking, Germany scores 79.7 (22nd place). For comparison, the Czech Republic is rated 76.3 points (41st place). Unlike 2017, when the market was saturated and economic growth led to intense competition, the situation today is different. Economic stagnation has resulted in fewer foreign companies pursuing expansion, creating opportunities for new players.

Many sectors, such as green technologies, digital transformation, and specialized services, remain attractive even in times of economic challenges. Although the market is not as dynamic as it was a few years ago, it still has 120 million consumers and strong purchasing power, making it a significant opportunity for companies that are prepared to meet the needs of the modern consumer.

The largest segments within German e-commerce are:

Let’s not forget that entering the German market practically opens the door to the entire DACH region (Germany, Austria, Switzerland). These three countries share not only strong economies but also a high standard of living and a stable political environment. The DACH region's population has exceeded 100 million people, and the total purchasing power in 2024 reached over €3 trillion.

The region has a well-developed infrastructure, and expansion means access to a broad market with high purchasing power, providing companies with opportunities for growth and expansion. While individual countries face specific challenges, the DACH region as a whole remains a strong and promising market for e-commerce development.

As the largest economy in the region, Germany continues to be the main trading partner for many countries, while Austria and Switzerland offer opportunities in innovation, finance, and technology.

Preparing for expansion to Germany in 2025 (just like in any other year) requires thorough planning and consideration of many factors. As the saying goes, "forewarned is forearmed" – the foundation lies in a detailed analysis of the market, competitors, regulations, and more.

The good news is, you don’t have to do it alone! If you are considering expansion and need a clearer understanding of the German market, don’t hesitate to contact us.