The German economy grew 0.3% in the final quarter of 2025, the Federal Statistical Office said on Friday, revising its initial estimate of 0.2%.

The Wiesbaden-based agency said private and government expenditure drove activity in the fourth quarter.

Meanwhile, the figure for the full year of 2025 was unchanged at 0.2% as Europe's largest economy narrowly avoided a third consecutive year of recession.

Earlier this week, the government lowered its forecast for growth in 2026, with gross domestic product (GDP) expected to advance by 1%.

Billions in government spending on infrastructure and defence are likely to provide a boost towards the end of the year, but economists do not expect a significant upturn until 2027.

The agency also warned that the government's ambitious spending programme must be accompanied by reforms to ensure long-term benefits.

Meanwhile, uncertainty linked to US President Donald Trump's aggressive tariff policies is set to further undermine Germany's export-led economy.

Sales to the US slumped in 2025, leading to a third consecutive year of decline for German exports.

Competition from China is also causing enormous problems, with tens of thousands of jobs being cut in German industries, particularly in the automotive sector.