German economic institutes revise 2026 growth forecast upward
German institutes raised their growth expectations following a strong first-half performance.
Germany's leading economic research institutes have raised their 2026 growth forecast from 0.6 percent to 1.3 percent, driven by a strong performance in the first half of the year.
Revision in Growth Forecasts
Following a stronger-than-expected economic performance in the first half of the year, Germany's leading economic research institutes increased their 2026 growth forecast from 0.6 percent to 1.3 percent.
In line with joint forecasts, the growth expectation for 2027 was also raised from 0.9 percent to 1.1 percent, while economic growth is projected to slow to 0.4 percent in 2028.
The Role of Exports and Industry
In Germany, Europe's largest economy, stronger exports, the manufacturing sector, and high public spending directly supported the growth process in the first half of the year.
The strengthening of global demand and the rise in artificial intelligence investments managed to offset the negative effects of weak investment and consumption components.
Political Pressure and Need for Reforms
Despite the upward revision in growth forecasts, the limited nature of the economic recovery coincided with a period during which economic reform pressure on Chancellor Friedrich Merz's government persisted.
In recent state elections, concerns regarding the cost of living and employment security ranked among the main topics on the voters' agenda.