German economy expected to grow in Q4, economic indicator shows

BERLIN (Reuters) -The German economy will grow slightly in the final quarter of 2025, according to an indicator of the Macroeconomic Policy Institute (IMK) at the Hans Boeckler Foundation seen by Reuters on Wednesday.

The indicator - which aggregates the latest available data on key economic variables - shows a recession probability of 34.8% and therefore does not point to acute contraction risks.

German exports unexpectedly fell in August on a sharp decline in U.S. demand, industrial output posted its biggest decline in more than three years and German industrial orders fell for a fourth straight month in August.

"In recent weeks we have seen some bad economic news, especially regarding weak exports to overseas markets. That is, of course, relevant but fortunately foreign trade isn't everything," said Sebastian Dullien, research director at IMK.

"What is clear, however, is that in the coming months the German economy cannot hope, as in the past, to be pulled out of crisis by exports," he said, adding that there is hope for a domestically driven upswing.

(Reporting by Maria Martinez and Klaus Lauer, Editing by Friederike Heine)