The Institute for German Economics (IW) released a study on Sunday that shows the German economy has lost roughly €940 billion in value creation since 2020, a consequence of several overlapping crises.
Each working person has, on average, seen a reduction of more than €20,000 in annual output – about one‑fifth of typical yearly earnings. Notably, a quarter of the combined loss stems from the year 2025 alone.
In 2020, the first year of the COVID‑19 pandemic, the hit was about €185 billion. By the time Russia launched its attack on Ukraine, pandemic‑related losses had accumulated to almost €300 billion.
Starting in 2022, the turmoil caused by the Ukraine war began to eclipse the lingering effects of the pandemic. Energy price spikes and persistent geopolitical uncertainty visibly slowed the economy, with a loss of roughly €85 billion that year. In the following two years, Germany’s output fell by about €140 billion and €200 billion, respectively.
The country had not yet bounced back from these twin setbacks when Donald Trump was elected U.S. President at the end of 2024. After taking office, he quickly imposed tariffs and made overt trade‑policy threats. In 2025, these actions pushed the value‑creation loss to an additional €235 billion – the highest figure for any single year across the entire crisis period.
