Germany - the largest economy in Europe - showed early signs of recovery in 2025 after nearly a decade of stagnation, although declining exports, intensifying competition from China, and the challenge of ensuring the effective deployment of Berlin’s large fiscal stimulus programme remain key hurdles to achieving sustainable growth. Gross Domestic Product (GDP) in the euro area’s largest member state expanded by 0,2% in 2025, marking a reversal after contractions of -0,9% and -0,5% in 2023 and 2024, respectively. Previously, Germany’s GDP growth averaged around +1,1% during the 2010s, supported by an export-oriented economic model amid a period of strong globalisation - an impressive performance at a time when many other European economies were still recovering from the financial crisis. However, when the Covid-19 pandemic struck, Germany’s industrial base began to weaken as automotive production slowed and Government investment stalled. Industrial weakness was further exacerbated by surging energy prices following the Russia-Ukraine war, automakers’ shift away from internal combustion engines, and increasingly fierce competition from Chinese manufacturers. Germany’s economic recovery is a positive signal for the broader European region, even though it continues to lag well behind the pace of U.S economic growth in recent years. U.S GDP expanded by 4,3% year on year in the third quarter of 2025.
The USD/VND interbank exchange rate edged down to 26.270 on Thursday amid a lack of fresh catalysts to support the prevailing market trend. The 26.250 - 26.300 range continues to provide strong support for the exchange rate ahead of key policy meetings by major Central Banks in the second half of January.
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