German Economic Institutes Revise 2026 Growth Forecasts Upward
Leading German economic institutes, including Ifo, IfW, RWI, and DIW Berlin, have increased their growth expectations alongside rising public spending and fiscal stimulus.
German economic institutes have announced that they have revised their 2026 growth forecasts upward in line with fiscal stimuli and a recovery in export expectations.
Ifo Institute's New Forecasts
Headquartered in Munich, Ifo raised its gross domestic product growth forecast for the German economy from 0.8 percent to 1.4 percent for this year. The institute also increased its 2027 expectation from 0.8 percent to 1.2 percent, while projecting a 0.8 percent growth rate for 2028.
Fiscal Stimulus and Public Spending
Fiscal stimuli encompassing infrastructure, climate neutrality, and defense spending are expected to reach 40 billion euros this year. This figure is projected to be at the levels of 27 billion and 18 billion euros in the next two years, respectively.
Expectations of Other Institutes
While IfW raised its 2026 growth forecast to 1.3 percent, RWI announced a forecast of 1.3 percent for this year. DIW Berlin, on the other hand, increased its growth forecast for the German economy to 1.2 percent.
Risk Factors and Economic Outlook
While high public spending and export growth accelerate the recovery, the war in the Middle East, energy prices, excessive bureaucracy, and structural problems continue to pose risks for the economy. The German economy had recorded 0.3 percent growth in the second quarter of the year.