General economic and institution-specific conditions
International interest rate and monetary policy
In 2025, following two years of recession, Germany recorded only modest year-on-year growth in gross domestic product (GDP) of 0.2%. Growth was attributable primarily to higher consumer spending by households and the government. The export sector faced higher US tariffs, the appreciation of the euro and stronger competition from China. As a result, exports declined again. Investment weakness also persisted. Investment in both equipment and construction was lower than in the previous year.1
Inflation in the euro area continued to decline over the course of 2025. Growth in the Harmonised Index of Consumer Prices (HICP) initially fell from 2.5% in January to 1.9% in May. In the second half of the year, momentum picked up slightly at first before easing again. In December, consumer prices were 1.9% higher than in the same month of the previous year and, on average, 2.1% above the 2024 level.2
In line with the favourable inflation trend, the European Central Bank (ECB) lowered its deposit rate in four steps from 3.00% to 2.00% in June during the first half of 2025 and then left it unchanged until the end of the year. The ECB also announced that its holdings of securities under the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) had been declining at a measured and predictable pace, as the Eurosystem did not reinvest the principal payments from maturing securities.3
The US Federal Reserve (Fed) also continued to ease its monetary policy in 2025. From the end of October, the Fed lowered its key policy rate in three steps from a range of 4.25% to 4.50% to a range of 3.50% to 3.75% by the end of the year.4
Over the course of 2025, the euro appreciated against the US dollar. At the end of 2025, the ECB set the reference rate for the euro/US dollar exchange rate at 1.175, which was 13.1% above the rate at the end of 2024 (1.039).5
Development of long-term interest rates
In the capital market, the new federal government’s announcement at the beginning of March of a debt-financed increase in public spending on infrastructure and defence led to a marked rise in the yield on ten-year German government bonds. Although yields initially declined again in the following weeks, they rose once more towards the end of the year. As a result, at the end of 2025 the yield on ten-year German government bonds stood at 2.86%, above the year-end 2024 level of 2.36%.6
Development of the economic environment in promotional activity
According to estimates by the Federal Information Centre for Agriculture (Bundesinformationszentrums Landwirtschaft), the production value of German agriculture rose slightly in 2025 to EUR 76.8 billion, up 1.7% on the previous year. While production value in crop production fell by 5.2% to EUR 32.4 billion, the value of animal production and animal products rose significantly year on year by 8.4% to EUR 39.3 billion. Here, demand was met by relatively limited supply of livestock for slaughter, resulting in higher producer prices. This did not apply to pigs, however, for which revenues were lower. By contrast, farmers received higher average prices for raw milk and eggs over the year.
In crop production, producer prices were mostly below the previous year’s level, particularly for potatoes, sugar beet, fodder crops and fresh vegetables. In the case of cereals, however, the strong harvest more than offset the decline in prices. As a result, production value increased. Higher revenues were also recorded for oilseeds and fruit.7
Overall, the economic situation of full-time agricultural enterprises in the 2024/2025 financial year (1 July 2024 to 30 June 2025) was only slightly better. On average, the business result stood at EUR 78,500, 0.4% higher than in the previous year.8
Revenue in the German food industry rose by around EUR 10 billion to EUR 240 billion in 2025. Exports accounted for 23.6% of this figure. The sector’s revenue continues to be driven above all by still high costs for consumers, particularly for fresh food.9
Electricity generation from renewable energy sources continued to gain in importance in Germany in 2025. It rose by 1% to 289.5 TWh. Onshore wind power generation accounted for the greatest share (37%), followed by photovoltaics (31%) and biomass (15%). The preliminary net increase in onshore wind power capacity was 4,605 MW in 2025, that being 7.2% more than in the previous year. The preliminary net increase in photovoltaics capacity was 16,577 MW, which was nearly 16.5% more than in 2024.10