The review of growth forecasts
The German government recently announced an update to its economic growth forecasts for 2025, reducing the estimates from 0.3% to 1.1% expected in autumn. This downward revision is a clear sign of the difficulties that the German economy is facing, after suffering two consecutive years of recession in 2023 and 2024. The Minister of Economy, Robert Habeck, described the current situation as a real stagnation, highlighting the uncertainty surrounding the economic and commercial policies of
the new Trump administration.
The causes of economic stagnation
Economic stagnation in Germany is not a recent phenomenon; it began in 2018 and continues to represent a significant challenge for the country. There are several causes that have contributed to this situation, including political instability, international trade tensions and rising energy costs. These factors have led to a decrease in investor confidence and a contraction in domestic demand, crucial elements for economic recovery. Germany, traditionally considered Europe’s economic locomotive, is now faced with a rapidly changing global environment, which requires timely responses and innovative strategies
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Implications for the real estate market and mortgages
In an environment of economic uncertainty, the U.S. housing market is also showing signs of weakness. According to data from the Mortgage Bankers Association (MBA), mortgage applications in the United States registered a 2% drop in the week to January 24. This decrease follows a slight increase of 0.1 percent from the previous week. Refinance requests fell by 6.7%, while new applications saw a decrease of 0.4%. Thirty-year mortgage rates remain stable at 7.02%, but economic uncertainty could further influence buying and investment decisions in the real estate sector
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