Germany faces economic headwinds, including a struggling automotive sector, rising unemployment, and a pivotal snap election in February.

The projected success hinges largely on a rebound in economically sensitive cyclical sectors and a recovery in Germany’s auto industry.
However, the DAX Index is expected to deliver earnings per share (EPS) growth of over 10% in 2025, the highest among European peers, according to Bloomberg News.
Data from Bloomberg Intelligence show the 40-member DAX index outperforming other benchmarks, including the broader Stoxx Europe 600 (7.1% EPS growth) and France’s CAC 40 (8.8%).
The projected success hinges largely on a rebound in economically sensitive cyclical sectors and a recovery in Germany’s auto industry, which may not materialize until later in the year.
BI equity strategists Kaidi Meng and Laurent Douillet cautioned about uncertainties, including high exposure to China’s economy, potential U.S. tariffs under President-elect Donald Trump, and the impact of the February election on domestic policies. “The outlook is promising but not guaranteed,” Douillet said.
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