The German Council of Economic Experts presented its latest spring report to the German government on May 21, 2025. Prof. Dr. Veronika Grimm is Professor of Energy Systems and Market Design at the University of Technology Nuremberg and has been a member of the most important committee for economic issues since 2020. The report includes the economic update of the German Council of Economic Experts as well as chapters on the federal government’s fiscal package for defense and infrastructure, bureaucracy reduction and structural change.
The economic situation in Germany remains challenging and will be largely shaped by US trade policy and the specific design of the fiscal package in the coming months. According to the German Council of Economic Experts’ spring report, gross domestic product will stagnate in 2025 (0.0% growth), with slight growth of 1.0% not expected until 2026. The German Council of Economic Experts expects inflation to remain stable at 2.1% this year and fall slightly to 2.0% in 2026.
“Although the markets are expecting further interest rate cuts, the price trend is currently particularly uncertain,” explains Veronika Grimm, Professor at UTN and member of the German Council of Economic Experts. For example, it is uncertain whether the current trade conflicts will drive or dampen inflation. An expansive fiscal policy in Germany could also increase inflation expectations and thus favor a tighter monetary policy by the European Central Bank.
In its report, the German Council of Economic Experts analyzes not only the economic development but also the possible spending on defence and infrastructure as a result of the amendments to the Basic Law. Two further chapters also deal with the topics of reducing bureaucracy and structural change in Germany.
It is made clear that the investment focus of the special fund, along with accompanying reforms, is crucial to restoring growth in Germany and preventing an excessive increase in the debt level. In particular, the Council of Experts warns against using the additional funds for consumption-oriented government spending. The Council also calls for a more consistent reduction in bureaucratic hurdles. A reduction in bureaucratic requirements and a modern, user-friendly administrative system supported by artificial intelligence are essential.
UTN Professor Veronika Grimm also addresses, among other things, challenges related to the European fiscal rules and emphasizes that, in addition to the effective enforcement of rules, greater attention must also be given to questioning regulations that hinder innovation.
To the annual report of the German Council of Economic Experts
About the German Council of Economic Experts
The German Council of Economic Experts supports politicians and the public on economic policy issues and topics. It was founded in 1963 as an independent body and consists of the members Prof. Dr. Veronika Grimm, Prof. Dr. mult. Dr. Dr. h.c. Ulrike Malmendier, Prof. Dr. Dr. h.c. Monika Schnitzer (Chairwoman), Prof. Dr. Achim Truger and Prof. Dr. Martin Werding. With its regularly published reports, the Expert Council aims to help the public and decision-makers in politics, business and society to form an informed opinion on economic policy developments in Germany.
The German Council of Economic Experts presented its latest spring report to the German government on May 21, 2025. Prof. Dr. Veronika Grimm is Professor of Energy Systems and Market Design at the University of Technology Nuremberg and has been a member of the most important committee for economic issues since 2020. The report includes the economic update of the German Council of Economic Experts as well as chapters on the federal government’s fiscal package for defense and infrastructure, bureaucracy reduction and structural change.
The economic situation in Germany remains challenging and will be largely shaped by US trade policy and the specific design of the fiscal package in the coming months. According to the German Council of Economic Experts’ spring report, gross domestic product will stagnate in 2025 (0.0% growth), with slight growth of 1.0% not expected until 2026. The German Council of Economic Experts expects inflation to remain stable at 2.1% this year and fall slightly to 2.0% in 2026.
“Although the markets are expecting further interest rate cuts, the price trend is currently particularly uncertain,” explains Veronika Grimm, Professor at UTN and member of the German Council of Economic Experts. For example, it is uncertain whether the current trade conflicts will drive or dampen inflation. An expansive fiscal policy in Germany could also increase inflation expectations and thus favor a tighter monetary policy by the European Central Bank.
In its report, the German Council of Economic Experts analyzes not only the economic development but also the possible spending on defence and infrastructure as a result of the amendments to the Basic Law. Two further chapters also deal with the topics of reducing bureaucracy and structural change in Germany.
It is made clear that the investment focus of the special fund, along with accompanying reforms, is crucial to restoring growth in Germany and preventing an excessive increase in the debt level. In particular, the Council of Experts warns against using the additional funds for consumption-oriented government spending. The Council also calls for a more consistent reduction in bureaucratic hurdles. A reduction in bureaucratic requirements and a modern, user-friendly administrative system supported by artificial intelligence are essential.
UTN Professor Veronika Grimm also addresses, among other things, challenges related to the European fiscal rules and emphasizes that, in addition to the effective enforcement of rules, greater attention must also be given to questioning regulations that hinder innovation.
To the annual report of the German Council of Economic Experts
About the German Council of Economic Experts
The German Council of Economic Experts supports politicians and the public on economic policy issues and topics. It was founded in 1963 as an independent body and consists of the members Prof. Dr. Veronika Grimm, Prof. Dr. mult. Dr. Dr. h.c. Ulrike Malmendier, Prof. Dr. Dr. h.c. Monika Schnitzer (Chairwoman), Prof. Dr. Achim Truger and Prof. Dr. Martin Werding. With its regularly published reports, the Expert Council aims to help the public and decision-makers in politics, business and society to form an informed opinion on economic policy developments in Germany.